"The collapse in paper gold price is
confirming big moves in the background
already taking place or planned in
the very near future. Be sure to know
that no bottom exists, as there is
no market, the balance between Supply
& Demand long ago abandoned. Physical
Gold has gone into hiding. It
will soon vanish from bullion merchant
shops and then from jewelry stores
across the world, in defiance. The
climax will be the broad realization
that no COMEX gold market exists,
all a sham." ~ EuroRaj

"I
recently had a conversation with a
friend who works for Sprott. We were
discussing the state of the precious
metals market. He told me that people
have asked Eric Sprott why he did
not place an order for a $billion
or more and stand for delivery of
physical gold? The reason he does
not is [that] it is written in
the contracts that COMEX officials
can fill the order with shares of
GLD. There would NOT be a force
majeure. What a racket! The leveraged
paper game is so foul and rigged that
the only game in town is physical
metals." ~ David Schectman (Miles Franklin)

"The
weight equivilant to nine Volkswagon
Beetles of dirt equals that of one
golf ball's weight of gold." ~ Mining.com (commenting on slight
yields of gold in grams versus raw
ore in tons, a standard feature in
the mining industry)

"When
the BRICS introduce a new currency,
the demand for Dollars will instantly
implode. Were Saudi Arabia to accept
this new currency to pay for oil,
all hell will break loose and Dollars
from all over the world will come
back home to roost. The inflation
that we have exported for all these
years will all of a sudden come back
home and hit all at once. You could
very well see a doubling or more the
prices of many products as the Dollar
supply chases the products. Add to
this economic scenario one where we
are at war over oil in the Mideast
and prices could simply explode to
unaffordable levels." ~ Bill Holter (indirectly, the new
BRICS currency will be Gold, not a
new currency, until the gold-backed
Yuan is deployed in trade, but any
departure from US$-based settlement
will cause a price inflation shock
inside the USEconomy, as the USDollar
would find its lower equilibrium value)

"That
is quite an understatement. This economic
corridor, parallel to the Karakoram
highway, will boast a series of special
economic zones, fiber optic cables,
a rail link, and a pipeline. This
proves that the Iran-Pakistan (IP)
pipeline, fought tooth and nail by
both the Bush and Obama Administrations,
will have an extension to China, will
become the IPC, and will offer yet
another Chinese access to the Indian
Ocean. It will take that pivoting
to Asia." ~ Pepe Escobar (on the Pakistan
pipeline importance, soon to be called
the Iran Pakistan China Pipeline)

"The
Tocqueville Gold Fund manager John
Hathaway's new investor letter attributes
the recent fall in the gold price
to a bear raid by investment banks
and hedge funds doing naked shorting.
Hathaway acknowledges gold's function
as insurance against the failure of
the policies of central banks and
speculates that the Federal Reserve
cannot return the German Bundesbank's
gold because the Fed has re-hypothecated
it into oblivion. Of course Hathaway
still cannot quite formally link central
bank policy to gold price suppression,
despite all the documentation. But
insofar as he now maintains that certain
entities act in concert to suppress
the gold price, he may start to be
considered a conspiracy theorist and
has earned a probationary tin foil
hat." ~ Ed Steer (Gold Anti-Trust Action Committee, in a mocking comment since Hathaway
has resisted for years that the gold
price is illicitly suppressed in a
corrupt market. Hathaway is a good
but naive man who probably believes
in the Easter Bunny.)

"I
put the slam down to the people who
are short gold. It has been very well-documented
that certain parties had very large
short positions in gold. The short
holders, who were expected to deliver
gold that was not deliverable, could
have created this downdraft in order
to cause gold to come into the market.
But it totally backfired. The sudden
drop in price led to extreme levels
of demand for physical metal, even
as paper gold sold off heavily. I
would venture to say, at the kind
of rates of consumption we have now,
we might have a 4000-ton shortage
in a 4000-ton market." ~ Eric Sprott

"The price of Gold is too low, which
creates excess demand and inhibits
supply. The current backwardation
may be validating this view. Or another
explanation is that investors have
finally figured out that the jig (rig)
is up. Let me explain, if investors
want Gold now, today, it is worth
paying more (interest upfront) to
get it. Maybe investors are afraid
that at a later date they will not
receive delivery. Maybe the message
has finally gotten out to enough investors
that the whole game is that of Fractional
Reserve, and just because you have
a piece of paper that says that you
own Gold, maybe you really do not.
If I had to guess, yes, shortages
have something to do with it, but
the driving force behind the current
backwardation is a lack of trust.
Trust that you will receive your metal
at a future contracted date. So you
buy it now and get it delivered now,
while you know that you still can." ~ Bill Holter (brilliant explanation)

"I
would suggest that banks and institutions
who play the long side of metals are
subject to real accounting pressures,
while institutions who are long USTreasurys
up the wazoo are not." ~ Rob Kirby

"All
of a sudden, people walk into Wal-Mart,
as usual, and they think they have
walked into Neiman Marcus. There is
no way to close this deficit when
corporations are moving the tax base
off-shore." ~ Paul Craig Roberts (who anticipates
a price inflation effect in future
months, as no quick fixes exist for
the bulging USGovt debt)

Editor
Note: Apologies for the Obama quote
on a July Fourth podium. It was a
spoof and the Jackass fell for it.
My bad! Fortunately, the accuracy
of the work is typically good, or
better than good. Disrespect is always
intended at the banking and political
leaders, but the facts must be presented
correctly.

##
INTRO GOLD FRAGMENTS

◄$$$ PROFESSIONAL GOLFER PHIL MICKELSON WON THE SCOTTISH OPEN AND THEN
THE BRITISH OPEN IN A WHIRLWIND JULY.
BUT HE IS HIT WITH A 61% TOTAL TAX
BITE ON HIS WINNINGS, THANKS TO THE
HEAVY TAX RATES IN THE UNITED
KINGDOM AND CALIFORNIA.
WELCOME TO SOCIALISM, THE NATIONAL
SOCIALISM TYPE. THINK WELFARE, WASTE,
AND WAR. $$$

The tax bracket on his golf championship
prize money is 40% then 45% in Great Britain. Add atop the
California
income tax and self-employment tax
since he is the employer of his golf
bag. The total tax bite is 61%. Of
$2.167 million in income, a ripe $954k
in tax goes to London
finance center. The remainder of the
heavy tax imposition goes to Sacramento, and the bottomless overhead pit for the Golden State. Welcome
to the vast world of socialism, the
national socialism type. Lefty Mickelson
must support the deadbeats who do
not work, the endless list of agencies
across California to protect the sedentary
human life and migrant animal life
(whose office names once filled five
full pages in a 2007 Special Hat Trick
Letter Report), the big bank welfare
for Wall Street bankers, and the warmongers
in the USGovt who kill for the love
of the hunt and the joy of pillage.
See the Daily Finance article (CLICK
HERE).
It is incredible what the governments
take and then waste.

◄$$$ RUMORS CONTINUE THAT USTREASURY BONDS ARE BEING SOLD TO PURCHASE
GOLD BULLION. PERHAPS DERIVATIVE DESKS
ARE EXECUTING THE TRANSACTIONS FROM
A LEVERAGED CONTROL ROOM, IN ORDER
TO COUNTER-ACT THE SOPHISTICATED DESKS
THAT MANAGE THE USTBOND PURCHASES.
ALL THE ARTIFICIAL USTBOND DEMAND
MIGHT HAVE FOUND ITS MATCH OF A COUSIN
VARIETY, TO REDIRECT TOWARD GOLD BULLION.
THE CONSTANT IS DRAINAGE OF AVAILABLE
GOLD. $$$

No proof, no evidence, no trails, no data. Just deep suspicion by smart folks.
The volumes would not have to be large
to have a profound effect. The Asians
are slowing converting paper wealth
to tangible wealth. They do so very
patiently. Some giant clients want
to buy boatloads (not truckloads)
of gold bullion, but instead, they
buy what the market gives them. The
drainage of supply is constant.

◄$$$ INSIDE THE VATICAN BANK, BANKER RESIGNATIONS. $$$

Two top managers of the scandal-plagued Vatican bank resigned
recently, following the arrest of
a high ranking cleric with close ties
to the financial institution. It is
the latest of a string of embarrassments
for the Holy See. The Vatican
is a major gold enclave, a primary
short-term lender of gold bullion
and bearer bonds, and a partner to
organized crime. The satanic bankers
in residence should never be confused
with the religious Christian cardinals,
although fascists permeate the college
of cardinals, including the chair
of the papacy. No links are provided
since blocked and might be risky.
These guys have friends in high places.

◄$$$ SHANGHAI SEES GLOBAL STATUS VIA NEW FREE TRADE ZONE. $$$

Shanghai officials are counting on emerging as a top financial center, furthered
along by introduction of the Mainland's
first free trade zone. Under the plan,
endorsed by the State Council, Shanghai is expected to allow companies to freely
convert foreign exchange within specified
areas of the city, while allowing
free capital and commodity inflow
for the entire city. Shanghai
has ambitions to become the nation's
primary economic engine, leapfrogging
Hong Kong as
the dominant financial hub in the
region. A healthy rivalry has begun.
The long awaited policy incentive
granted by the cabinet will only add
heft to the burgeoning city's attempts
to attract global capital and talent.
See the South
China Morning Post (CLICK HERE). If they could only
improve air quality in the Chinese
cities. Friends tell that Vancouver has been saturated, and the next target is Seattle, a project well along for the migration.

◄$$$ THE BRICS NATIONS ANTICIPATE SOMETHING BIG IN JULY WITH CHINESE PRESIDENT
GIVING AN URGENT SIGNAL OF UPCOMING
CHANGES. THE ROILED USTREASURY BOND
MARKET PROBABLY HAS ACCELERATED THE
TIMETABLE FOR THE GOLD TRADE SETTLEMENT
SYSTEM TO BE LAUNCHED. THE LOWER GOLD
PRICE HAS FURTHER AGGRAVATED THE EASTERN
PLAYERS. THEY ARE OBVIOUSLY CONVERTING
TO GOLD. $$$

The Taper Talk of relaxed QE by the USFed has rendered damage to the bond markets
in Asia and Europe.
The minor panic has drawn the attention
of Eastern leaders in emerging economies,
who must respond to construct an effective
safety net to endure the storm in
global financial markets. Spokesman
for the Brazilian government Thomas
Traumann announced that the BRICS
will decide on coordinated action
at a July meeting in Russia.
On their agenda is the USDollar, their
FOREX reserves, and always the progress
of gold trade settlement. In a phone
conversation, President Xi Jinping
noted that some new and complex elements
have occurred in international financial
markets that deserved the BRICS nation
close attention. Regard this is
a red flag. China
might be victimized by its inexperience
in the interest rate derivatives,
a hunch shared by some experienced
analysts. See the China Daily article
(CLICK HERE).
The Jackass belief is that in reaction
to Western turmoil, the East will
accelerate its Gold Trade Settlement
plans, and more rapidly develop its
BRICS Development Fund. The fund is
more accurately a clearing house for
USTBonds in Gold bullion purchase.
Turmoil breeds urgent reaction.

◄$$$ THE SWISS PARLIAMENT REJECTED THE USGOVT PRESSURE FOR ADDITIONAL
DISCLOSURE IN A NEW LAW TO REQUIRE
THE CANTONAL BANKS TO DIVULGE ACCOUNT
DATA FOR FOREIGN CITIZENS. RETALIATION
BY THE USGOVT IS TO COME. EXPECT A
BACKLASH AGAINST THE UNITED STATES.
$$$

In June the USGovt strongarmed the Swiss into pushing forward a new disclosure
law. The Jackass even received a phone
call from a trusted colleague in Zurich,
who thought if in place, the Kantonal
banks would face many $billions in
fines that they could not pay. The
law passed the Lower House in the
Swiss Parliament from a ramrod, described
by my colleague as passage without
reading its details. Bruce Krasting
has a guest post, surely one of the
most astute of ZH contributors. He
is Swiss and very informed. The USDept
Justice bullied the Swiss to overturn
their banking confidentiality laws.
The final vote was telling. The
somewhat surprising vote had the Swiss
Parliament telling the USGovt to back
off. Surely some US retaliation could result,
but the trend is clear. The United States is shown disrespect more often,
and shown the door as well. One is
left to wonder how long before the
Swiss join the BRICS in their effort
to forge a new reserve currency regime.
With Germany
and Switzerland as the core from Europe in the Eastern Alliance, the Eastern Trade Zone, and the BRICS adjunct members,
a formidable critical mass for the
trade zone would be constructed.
The Gold Trade Settlement would be
a slam dunk.

Krastings commented on the NO vote in Switzerland,
from which he expects US retaliation.
Much is at stake, far more than foreign
US citizen accounts. He wonders
which Swiss Bank will come under the
DOJ rifle scope. He expects a big
Swiss bank to be targeted. Credit
Suisse, Julius Baer, and the Cantonal
Bank come to his mind. Any DOJ indictment
of a Swiss bank would prevent it from
making USDollar wire transfers. With
other US banks boycotting the Swiss bank, it would functionally
be shut out of all their US$-based business. No global bank can operate
for long without the ability to make
transfers in USDollars. This specific
possibility has been discussed openly
in Switzerland. The Parliament rejection vote outcome
is therefore more important than it
appears, since they comprehend the
fallout. Next comes a hammer blow
to one of the country's important
institutions. See the Zero Hedge article
(CLICK HERE).
Switzerland
is the big banker battleground right
now. The Allocated Gold Accounts battles
are fought there. The secret lawsuits
are there. The biggest gold refiners
are there. The retail gold supply
comes from there. The last ditch BIS
gold supply is there. The account
data legal clashes are there.

Expect whatever action is taken to backfire on the USGovt. A war is being waged
behind the scenes in all matters pertaining
to banking. The issue of the Swiss
NOT vote extends to Gold Allocated
Accounts in some hidden manner, not
known to the Jackass at this time.
The United
States step by
step is becoming more isolated, even
with its Allies, a normal sequence
for the Nazis who run the WashingtonDC
political center and the New York
City bank center. The US
leadership crew is running out of
hosts while it proceeds as a parasite.
The chief exports from the United
States are bond
fraud, war, and diabetes. Full global
alienation is coming, then Third
World, then the Nazis leave town and
go into hiding. The USMilitary industrial
complex will follow the path of the
Odessa Group, seen in the 1940 decade.
History will repeat itself. Notice
no international forums (or Olympics)
are to take place on US
soil. There is no economic development
in the US, only forced federal progams, heavy taxes,
an archipelago of prison camps, and
a sprawling socialist system with
no evidence of democracy, where airports
are a molestation pit.

◄$$$ THE BIG BANKS HAVE SWITCHED FROM MASSIVE NET SHORT TO MODERATE NET
LONG IN GOLD FUTURES CONTRACTS. THE
(ALWAYS WRONG) SPECULATORS ARE HUGE
NET LONG, RIPE FOR THE SLAUGHTER IN
THE AUTUMN MONTH RUNUP IN THE GOLD
PRICE. IT WILL BE PERMITTED. $$$

Chairman Bernanke has bent, flinched, and caved in, his bluff called. More QE
(aka hyper monetary inflation) means
three things. The carnival atmosphere
featured a gaggle of Fed Governors
who either contradicted the official
position, or disagreed openly with
the wisdom of current monetary policy.
First, the USFed and the Chairman
have become a laughing stock to the
world, with lost integrity in a failed
franchise system of fiat money and
controlled markets. He has guaranteed
a dying USDollar global reserve currency,
as nations scramble to contend with
banking reserves losses. Second, the
policy will go into constant uninterrupted
high gear for monetary inflation.
The financial markets depend upon
it. The economies require it. A global
collapse is the consequence to continued
high volume money creation, even if
at a rising cost structure consequence.
Third, the big US
banks seized the opportunity and exited
a mountain of short positions in precious
metals. The big dead insolvent
banks indeed extricated themselves
from their costly losing short positions
in gold futures. The big US banks have gone from 106,000 net short contracts
to 45,000 net long. Next comes the
big gold price bounce, fully telegraphed.

The switcharoo was enabled by duping the Speculators, who are almost never right
and easily fooled at turning points.
They are not informed with insider
information on policy turns. The so-called
Specs went short a record 130,000
gross contracts, as seen in the chart.
In the last three to four months,
they piled on to create a spike in
shorts. They stand in opposition to
the big banks. Expect a Gold price
rebound and the big US
banks again picking meat off the Spec
bones. Despite the huge decline
in official gold and silver prices,
the metal stockpiles are not increasing.
Quite the opposite, which indicates
clearly that the liquidation freed
up all the paper loans and lease contracts.
The big US banks escaped the fate of vast underwater contracts.
Otherwise there would be gold for
sale everywhere in fresh metal supply.
Instead, the world has seen apparent
shortages for purchases of small,
medium, and large quantities. No gold
moved. It was a paper phenomenon.

◄$$$ THE COMEX WILL RUN OUT OF GOLD SOON AND GO TO CASH SETTLEMENT, SO
FORECASTS SINCLAIR. INCREDIBLE GOLD
HIGHS IN PRICE COULD COME IF THE BANKSTERS
LOSE CONTROL OF THE SUPPRESSION MECHANISMS.
$$$

In an interview with the Sprott Money Blog, gold mining entrepreneur and popular
spokesman Jim Sinclair forecasted
boldly that the New York Commodities
Exchange is likely to run out of real
metal for delivery in the next month
(as in August) and convert to cash
settlement soon afterwards. Refer
to Cash & Carry market, a view
shared by the Jackass. The event will
signify defeat of the evil gold market,
a free market soon to be born in its
wake. Sinclair expects to see a gold
price bottom set in early July, with
eventual gold price high near $50,000
per ounce, provided the paper manipulators
engaged in deep suppression lose full
control. He reminds observers that
this market has been like a beach
balloon that has been pushed to depths
never seen by man. See the Sprott
Money Blog article (CLICK HERE).

◄$$$ THE PENTAGON BUDGET SEQUESTER IMPACT HAS TURNED VISIBLE. THE USNAVY
CANNOT RULE THE HIGH SEAS ON LOWER
BUDGETS. A CERTAIN GLOBAL INFLUENCE
IS SURE TO ENTER DECLINE, IN GUIDED
COMMERCE, THEN FINANCE. $$$

A client has a contact who is participant to Virginia
Beach activity discussions, landside
and seaside. It is a giant USNavy
town on the Chesapeake, and a decent beach area once frequented by the Jackass (North
Carolina favored). A real estate agent
informed that his firm was taking
over 1400 foreclosures in August.
The USNavy has recently reduced personnel,
shifts, and hours. The income for
all non-combat personnel is to be
reduced by 20%, due to the budget
sequester cuts. A ship that had recently
departed with set course was ordered
to return to port within four days.
Since the 16th century, the #1
superpower has always been the one
which commanded the strongest biggest
navy. Witness a sign of waning
dominance and military presence. It
is reflected in the USDollar, the
USTBond market, and the WTI-Brent
oil price convergence. The USNavy
has only one carrier strike group
ready to deploy to either the Persian
Gulf or the Western Pacific. A year
ago, it had three carriers availab
le. The global influence as enforced
by the USMilitary is seeing the early
signs of twilight. My belief is
that probably half the USDefense budget
is stolen, finally catching up to
the nation. See the Bloomberg article
(CLICK HERE).

◄$$$ NOTES ON GOLD EXPLOSION FROM THE VOICE. A RESOLUTION IS NEAR. BANK
REVELATIONS ARE NEAR. PURSUIT OF A
NEW EQUILIBRIUM IS NEAR. THE RESULT
WILL CLEAN UP THE INVESTMENT BANKS
AND BULLION BANKS AND RESTORE ORDER.
THE GOLD PRICE AND SILVER PRICE WILL
SOAR TO GREAT HEIGHTS. $$$

The Voice has been very busy in the last month. But on a couple occasions he
offered a systemic viewpoint that
is very enlightening and encouraging,
if not spectacular. He wrote the following
thoughts, with my edits. Let it be
suggested that people should buy as
much physical Gold & Silver bars
and coins as possible, as long as
you can find it. The Boyz are pushing
the paper gold screen price through
the floor boards in a frantic attempt
to save their sorry asses. However,
by doing so they trigger the exact
opposite of the intended effect.
Instead of discouraging people to
flee Au/Ag, people are streaming into
buying like mad across the world,
especially in the Eastern
Hemisphere. One of the biggest banking
scams and frauds is about to be blown
into the open, exposing a fraud of
a magnitude incomprehensible to most
people. Focus on Deutsche Bank, which
he has mentioned numerous times as
being at the nexus of the bank frauds
in its vulnerability. It will be like
a spring loaded process. Once the
forces are released and the criminal
manipulations break down, we shall
see physical metals going into the
stratosphere. On the paper side, the
banking systems, the currencies, the
sovereign bonds, even entire economies
and political systems will collapse
onto themselves from the contagion
and fallout and disorder. It is called
Paradigm Shift that bring about great
changes. In my view it is like a global
financial earthquake.

The banksters are in for mega disclosures. The entire house of fraud and deceit
will come cashing down not before
long. The universe always strives
for equilibrium, as all will balance
out. Getting there is an incredibly
brutal process. By the way, here are
some Voice forecasts for all to savor
concerning physical Silver. The
Silver price will go to $400 per oz
in today's US$-based value terms,
in the near future, like not the next
few years, more like sooner. He cannot
provide any further concrete details,
but he gave a guarantee with 100%
certainty. He never does that.
Be sure to know the silver deficit
is enormous. The Jackass concluded
that some important major accords
have been struck, with implementation
to roll out in the next several months,
probably regarding Gold Trade Settlement
with a strong Gold Trade Central Bank
serving as foundation, where the understood
Gold price will be at least $5000
per ounce and the Silver price will
be at least $150 per ounce. Look
for military protection of the new
system to be provided by Russia
& China.

My speculation beyond this event calls for clearance and cleanup of the COMEX
& LBMA markets, and of the Wall
Street and London City crime centers
resulting in disposition of a mountain
of naked shorts, combined with legal
contract disposition of the fraudulent
management of Allocated Gold Accounts.
The entire process will then lift
the Gold Price to $7000 per oz and
the Silver price to over $300 per
oz in a second resolution phase. All
coming in the next couple years, when
the entire banking, currency, bond,
and gold systems break down totally
and completely.

◄$$$ THE BALTIC DRY INDEX IS HAS RISEN 30% IN RECENT WEEKS. THE GLOBAL
ECONOMY IS NOT IN RECOVERY. [JOKE:
PERHAPS GOLD SHIPPED EAST
IN WEALTH TRANSFER, AND USTBONDS SHIPPED
WEST TO SENDER REDEMPTION.] IN REALITY,
INSIDER SCOOP SAYS THE NUMBER OF ACTIVE
SHIPS HAS BEEN SERIOUSLY REDUCED BY
DECISIONS TO SCRAP OLDER VESSELS.
$$$

## BRICS & THE EURASIAN TRADE ZONE

◄$$$ EVOLUTION OF BRICS DEVELOPMEN​T BANK IS IN PROGRESS. NEXT IS THE CAPITAL CORE TO THE BANK, THEN DECISIONS
ON INITIAL INFRASTRCTURE PROJECTS.
MUCH WORK LIES AHEAD IN THE ACTUAL
DAILY OPERATIONAL FUNCTIONS OF THE
GOLD TRADE SETTLEMENT. AT FIRST THE
MEMBERS WILL DEPLOY BARTER AND SWAP
DEALS, THEN LATER GOLD PAYMENTS WITH
INTERMEDIARY SUPPLIERS. $$$

In the first two days of the St Petersburg Intl Economic Forum 2013, the agenda
focused upon the potential and limitations
of the emerging economic bloc, as
well as the establishment of the BRICS
Development Bank. The fund is cited
as going operational in 2015, but
the Jackass believes that is a distracting
ruse. It will be much sooner, like
in some form late in 2014, or by mid-year.
The SPIEF panel concluded that the
next step on the BRICS agenda should
be to reduce dependence on the USDollar
and the Euro in mutual trade. Think
Chinese Yuan Swap Facility usage.
What must be agreed on is the principal
core capital size and the amount each
country will contribute to the bank.
Given the completed agreement on the
BRICS Emergency Fund, expect quick
agreement. The Russian deputy finance
minister Sergei Storchak took the
lead role. A decision must be made
on whether the bank will finance investment
projects in the five BRICS states
or whether it will expand beyond them
to other emerging markets. Hard work
lies ahead on the nuts & bolts
of the BRICS Development Bank, as
only political accords have been done
to date. Forming capital is the next
major step. Storchak added that the
experience of the post-WW2 period
and Bretton Woods will be helpful
for the BRICS states when working
on the operational issues. The Jackass
belief is that the buildout will eventually
form the Eurasian Trade Zone initially,
with satellite projects to help along
Africa, Brazil,
and Iran,
thus linking them. The Yuan usage
in trade will be temporary, a device
used to wean off the USDollar in preparation
for gold used in trade settlement.
The USDollar has become an outsider
looking in, with minimal US industrial output.

The Russian hosted G-20 Meeting will merge with the next Intl Economic Summit
in St Petersburg this September, where the BRICS leaders will be in full
attendance. Do not expect much of
any US delegation to arrive. The
first order of business for the BRICS
Bank according to Kirill Dmitirev,
the head of the Russian Direct Investment
Fund, is to deal with two primary
trajectories, infrastructure, and
projects of high synergy effect. The
investments in infrastructure will
be gigantic. He mentioned joint projects
between Russia and India. No US-based projects are to be on the table.
See the BRICS Post article (CLICK
HERE).
The Bank will have a visible side
with projects, and an invisible side
with USTBond conversion to Gold bullion.
The bank will serve as the Gold Trade
Central Bank, issuing Letters of Credit
for trade facilitation, known as Gold
Trade Notes. The entire BRICS official
devices are intentionally being misrepresented,
so as to lull the USGovt to sleep
and to keep them off-balance.

◄$$$ THE ROSNEFT ENERGY DEAL WITH CHINA
IS FOR $270 BILLION OVER 25 YEARS.
THE LONG-TERM PACT WILL FORM THE EURASIAN
TRADE ZONE CENTRAL BLOOD SYSTEM, THUS
ENCOURAGING OTHER PARTNERS. THAT GERMANY IS NOT ONBOARD IS
A BIG MISSING PIECE. THE ENERGY SUPPLY,
THE PIPELINE DEVELOPMENT, AND THE
DEBT FINANCE ARE ALL VERY IMPRESSIVE.
THE FOUNDATION IS BEING CONSTRUCTED.
THE UNITED STATES WILL BE EXCLUDED.
$$$

OAO Rosneft signed a US$270 billion supply deal with China
National Petroleum Corp (aka Sinopec),
making the Middle Kingdom nation the
biggest market for Russian oil. The
state-run Rosneft, the largest world
oil producer by output, will receive
a $70 billion pre-payment. It pledges
to supply 360 million metric tons
of crude to China over 25 years, double the previous deal.
The agreement signed in April called
for Rosneft to deliver at least 743,000
barrels per day to CNPC starting in
2018. Rosneft agreed to increase oil
flows to China
through an extension spur from the
East Siberia-Pacific Ocean pipeline.
The agreement highlights a growing
partnership between China,
the top energy consumer, and Russia,
the largest oil producer. Rosneft
and oil pipeline monopoly Transneft
have already secured $25 billion from
China in 2009 as upfront payments by pre-selling
oil, thus gathering cash to finance
growth and new construction projects.
Russia
first began supplying China
by railway, then later by a new pipeline
while opening a Pacific port of Kozmino in 2009. Together with supplies
to Kozmino, Russia is already exporting around 750,000 barrels
per day to Asia,
or 17% of its overall exports of 4.4
million barrels per day.

The deal was announced by President Vladimir Putin at the St Petersburg Intl
Economic Forum last week. The Sino-Russian
energy deal signals two things, a
firm commitment to China,
but also a forceful warning to Germany
to climb onboard. The trend is
being set for fewer European deals,
more Asian deals in commitment. As
a result, the Russian oil output will
be directed away from Europe.
Rosneft was elevated to the biggest
oil producer after acquiring TNK-BP
for $55 billion this year. Russia produced 10.5 million
barrels per day in year 2012. The
pre-payment exceeds the entire Rosneft
debt burden at $54 billion, making
the giant debt free. The giant Russian
firm will be more at liberty to develop
its remote Arctic fields. To be sure,
the Rosneft debt will be paid off
in the form of USTBonds, the newest
garbage asset.

China is the holder of the world's largest
foreign exchange reserves. Rosneft
completed the contracts for a long-term
$2 billion credit line under an accord
signed March 2013. Rosneft also signed
oil supply deals with trader Trafigura Beheer BV (the Dutch multi-national
commodity trading company) and PKN
Orlen (a Polish refinery firm). The
Trafigura deal includes an advance
payment of as much as $1.5 billion
for 10.1 million tons of crude oil
and refined products over five years.
Under the agreement with PKN Orlen,
Rosneft will supply 8.28 million tons
of crude under a three-year contract
through June 2016. The delivery would
be to the Czech
Republic via the Druzhba pipeline. Estimated value is about $6.2 billion.
See the Bloomberg article (CLICK HERE)
and the Reuters article (CLICK HERE).

Putin is giving strong signals to Germany. The message
is clear, that it is time to openly
join the Eurasian Trade Zone, since
China
has explicitly committed to it with
a 25 year deal. For the last few years
since the Lehman black hole was created,
followed by wretched insolvency, Germany has been bogged down
with its European commitment. The
Southern sovereign debt burden has
been a millstone around its neck.
It must clean house with its wrecked
banks, and turn East for the future.
The cost of delay will rise each year.
At least Germany
has refused further credit extensions
to the South. However, many heavy
rail lines extend from Russia
to Germany, a sign of future
commitments. It bears repeating, The
banks and investors holding Rosneft
loans and bonds will be paid with
USTreasurys courtesy of China, as the big dump will
commence very soon. The finance flows
are never mentioned in the West.

## OIL PRICE CONVERGENCE & PETRO-$ SUNSET

◄$$$ THE WEST TEXAS CRUDE OIL PRICE AT THE START
OF JULY WAS $4.28 BELOW THE BRENT
OIL PRICE. A YEAR AGO IT WAS $18 TO
$20 LOWER. THE CONVERGENCE IS WELL
ALONG, ALMOST COMPLETE. IT COULD SIGNAL
THE DEMISE OF THE PETRO-DOLLAR, THE
END TO SAUDI OIL PAYMENTS IN USDOLLARS.
THE NATURAL GAS COOP LED BY GAZPROM
WILL DISPLACE OPEC AS THE MAJOR STABLE
COMMODITY PLATFORM FOR THE NEW FINANCIAL
SYSTEM. $$$

The Jackass desk received a great forecast call in April by my European source
EuroRaj, that the two crude oil prices
would merge. The convergence had only
begun at the time, having been at
least $15 for two years. He heard
rumors among the finance center
colleagues and friends that the Petro-Dollar
sunset required a merger of the two
important crude oil prices. The
$15 to $20 per barrel spread (lower
W.Texas price) had to be eliminated.
He was correct, as it has been eliminated.
Its convergences forebodes a demise
of the Petro-Dollar. The confirmation
will come from a few sides. Something
important is near on the Saudi requirement
of exclusive USDollar oil payments.
When they converge, it will make the
news, but be misinterpreted without
a doubt. Like a nonsense story about
stronger US demand from an
economic recovery, finally arrived.
Maybe the US media merchants will drone on about diverted
Canadian Oilsands supply to China.

The crux of the oil relationship with the USDollar is simple, apart from the
Saudi connection. Any control of
the WTexas oil price is implicit control
of the USDollar. Convergence thus
means the US
bankers lost control of the global
oil price. But if the WTI price
is actually linked to the Brent, then
those who control the Brent price
also control the US
oil cost. Brent is controlled to a
much greater extent by rough cut Demand
& Supply, and not by derivative
gaming done in New
York or London.
The Anglo Boyz have essentially lost
control of setting energy prices,
which drives trade and economic gro
wth. Conclude that the US Boyz have therefore lost control of the USDollar
itself. Explicitly sovereign nations
will also see a lesser need to hold
USTBonds as a reserve currency, since
Brent is traded in quite a few currencies.
Watch for big developments coming
from Russia to set the oil price.
The confirmation of the death knell
will be the Saudis announcing acceptance
of crude oil payments outside the
USDollar.

By July 10th, the Brent-WTexas spread was below $2.50 per barrel. It finally
went below $1 last week, to call it
a convergence, as forecasted. In the
first half of July, actually a 12-day
period, the West Texas price rose
14% from $92.67 to $105.99 in the
wake of the eruption in Egypt.
It did not rise from growth or its
hope. Tyler Durden reported the collapse
of the oil price spread as self-feeding.
Between infrastructure issues in the
United States, technicals
in the market, and Middle Eastern
unrest, the premium is building in
the WTexas price. The USEconomy must
soon react to $4 gasoline. The growth
story will be very difficult to sell.

Many have been the days when the West Texas Intermediate (WTI) oil price has
risen over $1, sometimes over $2,
but the Brent price had been up much
less. A strange factor must be watched,
which tends to confirm the manipulated
price spread. If Egypt was a major price factor, WTI should have
been unaffected while Brent should
have spiked as it passes through the
Suez Canal. That has not happened. None of the Egyptian parties
have hinted at closing the Suez
Canal, nor would their army allow
it. The convergence is a red flag.
EuroRaj goes further, expecting the
Obama Admin to allow the Keystone
Pipeline construction possibly soon.
Just last week, Obama gave a speech
favoring the resumed progress of the
controversial pipelines. See the RT
News article (CLICK HERE). The
US is backed in a corner.
The West Texas Intermediate crude
oil price has been a longstanding
benchmark, but it will become redundant.
The Brent convergence means it
will be redundant, and worse, that
the Petro-Dollar will die, or enjoy
a not too slow sunset. Unfortunately,
it means the USDollar will lose its
global reserve privilege, and the
United
States will slide
into the De-Industrialized Third World.

EuroRaj wonders if by September or October, the oil for export is pegged to
the Brent price. The usage of Brent
in pricing signals a USDollar that
no longer enjoys their reserve currency
role, abused in hegemony. He believes
the Saudis might be quietly requesting
more Gold in the oil trade, as a direct
response to the USFed monetary inflation
initiative, called euphemistically
QE, but called QE to Infinity by the
Jackass. The hidden factor is that
Saudis no longer want USTreasury Bonds,
as a result of diminishing USMilitary
role by the United
States in the
entire Middle
East. With the rise in the Chinese
Yuan currency (swap facilities), and
Gold Trade Settlement near, the Petro-Dollar
is being phased out. Confirmation
is the Brent-WTI convergence.

When the US benchmarks its
oil price to Brent, it will be following
a global benchmark which will be determined
by Demand & Supply dynamics, and
not by derivatives out of New
York. The convergence signals a reduced
role by the gaming on Wall Street
at the big Morgan Stanley commodity
desks, for instance. The inability
to control energy prices will be the
biggest blow to the USDollar, sure
to push average prices at the pump
beyond $4 per gallon. Notice the rising
gasoline price during a long recession
over the past decade. All the while,
the Gulf of Mexico
production has been shut down by the
Halliburton chess move, complete with
their sabotage of the DeepWater Horizon
platform. They took control of the
onshore fracking chemical business,
while dominating in the onshore leasing
business. Think murder for commercial
motive, which resulted in Matt Simmons
being suicided in his Maine
jacuzzi in August 2010.

The demise of the Petro-Dollar will be timed with the
expected fall of House of Saud, and
the rise of the new NatGas Coop led
by Russian Gazprom. The other natural gas players will be a truly strange set of bedfellows with
Qatar,
Iran,
Israel, and Turkmenistan playing big supplier roles. The energy
core foundation is tied to a financial
platform, which will displace OPEC.
Expect the OPEC to fracture, as the
Saudi royals gradually lose their
grip of power. Chaos is coming to
the Persian Gulf.
For an enlightened review of the critical
factors involving the USDollar, crude
oil, and Gold, see the I-Tulip article
by Eric Janszen (CLICK HERE).
His reference to Planet ZIRP would
be more amusing, if not so tragic.
A surreal setting on earth is taking
over.

◄$$$ TWILIGHT IN THE DESERT, AS THE UNITED STATES IS REBUFFED IN EGYPT OVER THE SAUDI AND UAE SUPPORT, FOLLOWED
BY A QATARI EXIT. THE IMPLICATIONS
ARE FOR A GRADUAL SUNSET OF THE PETRO-DOLLAR,
A CRITICAL FOUNDATION OF THE GLOBAL
RESERVE ENFORCEMENT. AMERICAN INFLUENCE
IN THE REGION IS DISCREDITED AND VANISHING,
WITH GROWING MOMENTUM AND WIDER RECOGNITION.
THE DEMAND FOR USDOLLARS TO SETTLE
FOR ARAB OIL WILL BE ENDING SOON,
PARTLY BECAUSE OF FOREIGN POLICY.
THE SAUDIS WILL NEXT TURN ATTENTION
TO STRONGER ACCORDS WITH CHINA,
IN FURTHER DEFIANCE
OF THE USGOVT. $$$

The untold story about Egypt is the fallout effect with Saudi Arabia. The ouster
of President Mohamed Morsi in Cairo
involved direct participation by the
Saudis behind the scenes. In fact
it was a joint Saudi & UAE project,
as they do not approve of the Muslim
Brotherhood that the USGovt and Obama
Admin is so closely tied to. The Saudi
defiance of the White House marks
a turning point in foreign relations.
The history goes back almost 70 years
between the House of Saud and the
US-UK Empire. In 1945 on his return
from the fateful Yalta Conference,
US President Franklin Roosevelt met Saudi King
Ibn Saud and won exclusive rights
for the US
oil companies (Rockefeller group)
to conduct commerce with Saudi Arabia, to tap its vast
oil wealth. The Seven Sisters were
born. During the 1973 oil shock called
the Arab Oil Embargo, believed to
be orchestrated by Kissinger, the
OPEC producers hiked the oil price
almost 4-fold. The great recycle plan
was put into effect, where the Saudis
and other Persian
Gulf oil nations would sell their
oil in US$ terms, and recycle their
surplus in USTreasury Bonds. They
also invested in the big US banks like Citibank. The
pact assured the USDollar would become
the world reserve currency. The pact
is otherwise known as the Petro-Dollar
defacto standard. Also in return,
the USGovt agreed to sell advanced
US weapon systems to the Saudis, including training
for the Saudi Air Force.

The US arms sales saw a giant quantum leap in 2010.
When the Arab Spring was launched,
and a queer version of democracy broke
out in North Africa, as in Tunisia
and Egypt,
soon to reach Libya, the Obama Admin announced the largest arms
deal in US
history. The US
agreed to sell the Saudis 84 new F-15
jets (fighter aircraft) and to upgrade
another 70 fighter jets as part of
a $60 billion deal. The plan was to
isolate Iran.

The plot thickens on the aid front. Before the Egyptian military coup, the Saudis
had given secret assurance in Cairo
to Defense Minister and head of the
Army, that the Saudis along with other
conservative Gulf oil states including
Kuwait and UAE would guarantee financial
support in the event the Obama Admin
cut the EUR 1 billion annual aid to
Egypt's military in retaliation for
ousting the US puppet Morsi. On July
17th, the newly sworn Egyptian transitional
government confirmed that it has received
EUR 6 billion in grants, loans, and
fuel from Saudi Arabia and the UAE. The details are straightforward.
The Saudis approved EUR 4 billion
in aid to Egypt, and the UAE offered
EUR 2 billion in desperately needed
support for the economy. The Saudi
funds consist of a EUR 1.5 billion
central bank deposit, EUR 1.5 billion
in energy products, and EUR 750 million
in cash, as confirmed by Saudi Finance
Minister Ibrahim Al-Assaf. The
UAE will make a EUR 750 million grant
to Egypt and a EUR 1.5 billion
loan to the Egyptian central bank,
as an interest free deposit. The Arab
aid package news is doubly insulting,
since the USGovt had insisted that
Morsi regime conform to harsh IMF
conditions for financial aid. Think
austerity.

Qatar reacted emphatically. The Gulf energy
rich state was absent from the aid
to Egypt.
In fact, the Qatari Emir Hamad bin
Khalifa al-Thani had sunk over EUR
6 billion in Egypt
since the revolution almost three
years ago. He also bankrolled another
estimated EUR 7 billion for Islamists
in Libya,
Syria,
and Gaza run by Hamas. He had been major financial backers for the Muslim
Brotherhood that had run Egypt, now toppled. Qatar
is home to the a giant USMilitary
complex, the US Central Command Forward
HQ and the Combined Air Operations
Center. Until
the military coup against Brotherhood
rule in Egypt
on July 3rd, Qatar
was home to leading members of the
Muslim Brotherhood. Immediately
following the Cairo
Coup, the Emir of Qatar abdicated his throne
in favor of his son. Suddenly
Hamad bin Jassem al-Thani, architect
of Qatar's
pro-Muslim Brotherhood foreign policy,
has been silenced. He was removed,
replaced by a military figure. The
Qatari leadership is embroiled in
a recalibration on foreign policy,
so as not to be completely isolated
within the Saudi-dominated
Gulf Arab states. The USMilitary finds itself in a precarious position,
resident in Qatar. The muscles flex to US arms, but without
testicalia, and surely a dysfunctional
brain stem.

The Saudi decision to support the overthrow of the US
puppet Morsi, and derail the Muslim
Brotherhood revolutions across the
Islamic world has dealt a major setback
to the crazy destructive US strategy. The Brotherhood has been given a
spear in the back. The undermine of
China
in Persian Gulf
and East African region is no longer
active. Expect that China
gave approval of the Egyptian change
of guard. The analyst consensus is
that the Saudi monarchy began to fear
that the secretive Brotherhood would
one day rise in insurrection against
their rule as well. The Saudis are
still bitter of the USGovt smashing
the Baath Party secular dictatorship
of Saddam Hussein in Iraq, since it brought
a majority Shiite power to their neighbor
to the north. The ties between Iran
and Iraq grow each month on the
commercial front. The Saudis had enough
of US meddling. The House of Saud
finds itself not stable, given King
Abdullah is clinically dead. The Saudi
rule is more in jeopardy from reform
demands, internal strife, rising food
prices, royal family friction, and
competition over the throne. The Obama
Admin has been silenced with hands
tied, able to do little. The conclusion
is basic, a strong indication of the
declining US global power. See the Global Research article
(CLICK HERE).

As footnote, The Voice gave advanced warning of the Egyptian military coup three
days before it occurred, from direct
communications through a contact from
a ranking general. Therefore the Jackass
is informed in realtime on some events,
but they are gnarly. Note that the
death of the USDollar will come about
for political reasons as much as banking
reasons, laced with economic justification
(rising global costs). It has turned
toxic with QE to Infinity, aka hyper
monetary inflation. Weimar is not a solution. It is morphine for a
rotting corpse.

An addendum story. The Saudi violence in civil disorder incidents in the eastern
provinces adjoins the Bahrain location. The situation
is different there, since majority
Shiite but ruling moderate Sunni royals.
Bahrain
is catching fire next door to Saudi.
Dozens have been injured in Bahrain as police and protesters
exchange fire. The risk is acute for
Saudi Arabia, on its eastern border with Bahrain, and on its western border with Yemen. It is only a question
of time before the entire Middle
East will be on fire. Those in power
can drag it out a bit longer but they
cannot stop it from blowing up into
their faces. See the RT News article
(CLICK HERE). The financial
victim will be the Petro-Dollar.

◄$$$ INDIA PLANS TO PAY FOR IRAN OIL IN RUPEE CURRENCY. IRAN MIGHT BE RELAXING THE GENEROUS TERMS TO INDIA. LOOK FOR INVESTMENT
BY IRAN
IN INDIAN REFINERIES OR OTHER ENERGY
RELATED INFRASTRUCTURE. MORE LIKELY,
THE BULK OF RUPEE HOLDINGS WILL GO
TO PURCHASE GOLD BULLION DIRECTLY
BY TEHRAN. THE OIL FOR GOLD TREND WILL ACCELERATE IN THE EASTERN HEMISPHERE.
$$$

The previous arrangement had been the Indian oil purchase from Iran,
paid 50-50 in Euros and Indian Rupee
currency, an equal split. A closer
review reveals that Iran
cannot easily convert Euros to Gold.
Possibly the Iran
leaders do not trust the European
system after what happened in Cyprus. Their accounts
in Europe could
be frozen and looted at any point.
Or the Iran Govt leaders do not wish
to tempt with further motive on sanctions
with gold on the table. Essentially
an Oil for Gold swap is in place,
paid with INRupees and Indian banks
being the middlemen. Any undue downward
pressure on the Rupee is because of
general elections next spring, the
result of the massive freebies the
present government has been doling
out. On the other side, Indians are
looking to export pharmaceuticals
to Iran so as to bring down the
net Rupee deficit. Maybe an investment
stake in Reliance Industries is in
store by Iran,
toward the large refiner in India.
Help could come to help support the
Rupee by holding those funds or investing
them in Indian businesses.

Maybe Iran will announce
the construction of new energy facilities
in India, since still growing
in its middle class. The key is for
Iran
not to dump the Rupees rapidly, causing
more downward currency pressure for
India, which would cause even
more price inflation. The direct
plan is for Iran to use the Rupees to
buy Gold bullion for its reserves,
an extension of the Gold Trade Settlement,
or perhaps a precursor. Doing
so comes with the understood impact
of not preventing the Rupee exchange
rate to go lower. Look for closer
commercial ties between Iran
and India,
in direct investment, perhaps in a
new pipeline or port facilities, even
off-shore platform projects. India
is in trouble with gold imports and
crude oil imports both.

EuroRaj pitched in, whose shared thoughts have been valuable. These events fall
in his domain of expertise in India, Iran,
and Turkey.
He emphasizes that Iranians are very
crafty. They offer a four-pronged
approach to India.
1) They have offered very good terms
of trade with regards to crude oil
purchase. This means extended price
fix and credit terms. 2) They are
dangling exploration contracts to
the Indians, who are active in off-shore
exploration. 3). They are dangling
the Iran-Pakistan gas pipeline to
India, for inclusion or extension.
4) India
in return is requested to supply car
and pharma exports to Iran. The major point to
recall in the USDollar demise is that
ultimately trade will lead geopolitical
events. It is destined that India
and Iran
will be very strong partners over
the coming decade. They will also
continue to bond with gold intermediary
connections. They make for a natural
fit from a geopolical, demographic,
and trade perspective, along with
being neighbors. Be sure to know,
all of this buildup in bilateral commercial
relations happens under the watchful
eye and guidance of the Russians.
See the PressTV article (CLICK HERE).
The middle finger from India
goes to the United
States. On the
surface the Indians play the Anglo
game to hold back the gold retail
tide. Behind the scenes, they cut
major deals with Iran.

##
GOLD MINES LOSING PROFITABILITY

◄$$$ GOLD HAS CRASHED THROUGH PRODUCTION COST LEVELS FOR MANY MINING PROJECTS.
MANY FIRMS SUDDENLY HAVE IMPORTANT
PROJECTS THAT HAVE TURNED UNPROFITABLE.
THEY WILL BE SHUT DOWN, IF NOT RIGHT
AWAY, THEN SOON. THE EFFECT TO SUPPLY
WILL BE HARSH AND SUDDEN. EXPECT 2013
GOLD OUTPUT TO BE 10% TO 15% LESS
THAN LAST YEAR. DITTO FOR SILVER,
MAYBE WORSE SINCE A BYPRODUCT METAL.
THE COLLECTION OF LARGE MINING FIRMS
HAVE SUFFERED A SIGNIFICANT FALL IN
THEIR MARKET CAPS. $$$

With the magnificent COMEX Gold price decline that flirted with the $1200 level,
the threat has been critical for many
mining firms. For many projects,
large and small, the current official
price has gone below the common cost
for producing an ounce of gold. The
mining sector will suffer an impact,
if prices remain at or near the $1200
to $1300 range. Andrew Su at the
Compass Global Markets (brokerage
house from Down Under) said the all-in
costs are rising fast, from both increased
costs and more accurate comprehensive
cost analysis. He suspects the mining
cost per gold ounce is much higher
than $1000. He pointed out that several
gold mines closed recently in Australia.
Some companies will actually go bust.
They did not react quickly enough.
Widespread job cuts have been announced
on all continents, from Australia
to North America to South America
to South Africa.

Su added that fixed costs like worker wages are actually rising quite significantly
while gold prices have fallen, adding
pressure to mining operations.
To be sure, the gold companies are
scrambling in a panic. Worse still,
the market capitalizations of the
majority of mining firms have fallen
hard, adding to discouragement and
perhaps some bad judgment. The marquee
names are down in headline stories,
like Newcrest Mining (3rd largest
gold producer) down over 50% since
April, like Newmont (2nd largest gold
output) down 50% in the last ten months,
like Barrick Gold (1st in gold output)
down almost 50% also since April,
like Kinross Gold down 35% in the
last four months, like Royal Gold
down 30% in four months, like Gold
Fields down 50% in the last six months.
like Anglo-Gold Ashanti down almost
60% in the last year. The list of
damaged stocks is long. The last two
are South African firms, beset by
additional problems like labor and
marxist nitwits.

Gold falling below $1200 to $1300 per ounce is a serious range at which the
miners, especially the smaller ones,
will face profitability issues. Here
is the business factor that appears
to prevail, something the Jackass
minimized somewhat a month ago and
two months ago. Many mining firms
will chose to maintain certain production
levels for a while just to see what
happens in the market. The delayed
decision to cut back on production
will prove to be costly, as they will
waste their valuable assets from ore
in the ground. The industry is
currently seeing a lot of marginal
production from many of the smaller
miners, all at risk. My belief is
that many mining firms are not properly
disclosing their project halts and
curtailed vein work. They do not wish
to render deeper harm to their stock
share valuations from negative press
releases. They will admit the reductions
to production when they must. But
many will delay, relying upon unfounded
false hope of a quick rebound. Some
companies will find it hard to stop
the momentum of a big business, with
supplier commitments and contractors
under contract. They cannot turn on
a dime (change direction quickly).
While some nimble companies will cut
back quickly to save funds, many others
will continue due to concern over
worker income, even losing workers.
Su expects that mining firms will
start to close down some of the more
costly mines, delay on marginal project
launches, and spend less on exploration,
thus investing less in general. Smaller
Australian miners that have ceased
operations completely in the past
year include Central Norseman Gold
and Navigator Resources.

Su offered a dire outlook that reflects the extreme conditions. He said, "Prices
may fall for a very brief period of
time, but I think the economics of
it is such that the entire industry
will fail to exist if gold falls further.
This fall in the price of gold is
not truly based on Supply & Demand.
It is based on expectations of what
the Federal Reserve is doing. Somewhere
along the line the gold prices will
simply start rising, because production
will reduce supply significantly."
The Gold market will eventually respond
to a significant reduction in supply
as miners cut back, in his opinion.
It will first be stabilization, then
a sharp rise in the Jackass view.
Ignore Su's comment about USFed expectations,
since he seems oblivious to the naked
shorting concept and paper ambush
weapon being used in grand style.
That weapon is not discussed openly
in the financial press, any more than
banker sexual perversions or satanic
rituals. See the CNBC article (CLICK
HERE) and the Kitco article (CLICK
HERE)
and the Mining.com article (CLICK
HERE)
and the Seeking Alpha article (CLICK
HERE).
The sheer volume and diversity of
cost analysis analyses on the mining
industry has never been witnessed
before, like the illicit naked shorting
with total government impunity provided,
protected, and sustained.

◄$$$ !!! THE BEST APPROACH WOULD BE FOR SEVERAL
LARGE MINING FIRMS TO ORGANIZE AND
TO DECLARE A STRIKE AGAINST COMEX
& LBMA, TO HALT ALL PROJECTS FOR
A 30-DAY PERIOD, MAYBE A 60-DAY PERIOD.
THEY MUST STOP SUPPLYING THE CORRUPT
METALS EXCHANGES, FOR A MAXIMUM EFFECT.
THEY SHOULD SEEK OUT ALTERNATIVE BUYERS
FOR THEIR PRECIOUS METAL OUTPUT. !!!
$$$

Only if the New York and London
centers of corruption are dealt with
like crime centers, will the gold
market recover sufficien tly. The
other alternative would be to formally
announce alternative supply arrangements
with the Sprott Fund, the Chinese
central bank, the Russian central
bank, and major hedge funds. They
might be smart to divert supply to
the desperate bullion banks that oversee
raided Allocated Gold Accounts in
Europe, and supply
them secretly. The Jackass does
not believe the mining firms have
the stones for such a bold organized
maneuvers, nor the business skill
at the executive management level
generally. A Silicon Valley high-tech
firm in California would never continue plant operations at a loss like many
obtuse lumbering mining firms.

◄$$$ JACKASS IS GOING ON RECORD SAYING THE 2013 MINE OUTPUT FOR GOLD &
SILVER WILL BE 10% LESS THAN 2012,
PERHAPS 15% AND HORRIFIC. THE STRESS
TO THE GOLD & SILVER MARKETS WILL
BE ENORMOUS AND CAUSE GREAT CHANGES.
THE PRESSURE FOR A GOLD MARKET BREAKDOWN
RISES WITH EACH PASSING MONTH. HOWEVER,
THE BIG DECLINE IN MINE OUTPUT MIGHT
NOT BE SEEN UNTIL YEAR 2014, AS COMPANIES
WILL BE SLOW TO RESPOND. SELF-DELUSION
COULD PREVAIL IN PRUDENT DECISIONS
ON PROJECT SHUTDOWNS BEING DELAYED.
$$$

The forces are numerous. Lower official Gold & Silver prices, natural accidents
like cave-ins and mudslides and underground
wall collapses, labor strikes over
worker conditions and pay scales,
hostile government confiscations seeking
to execute their resource nationalism,
even legal challenges to mine property
ownership, these all form grand
obstacles and challenges for continued
mine output. These factors have
been laid out at length in past Hat
Trick Letter reports. Some suspect
sabotage, like at the Kennecott landslide
in Utah. My doubts linger that it was indeed sabotage, but rather nature.
Witness a natural and human response
to the corrupt COMEX pricing mechanisms
for precious metals. These banksters
have royally screwed themselves, like
putting plastic bags on their heads
while stabbing themselves in rituals
on stage. The telling report card
will be lower 2013 mine output, sure
to feature shocking declines. By August
or September, some analyst extrapolations
will hit the news wires. Expect at
least a 10% reduction in gold output,
possibly 15%. For silver a slightly
different factor must be reckoned
with. Silver is a common byproduct
of other metals mined, like zinc,
lead, and copper. The global economy
has lower industrial metal demand,
but these metal prices are not suppressed
like gold & silver. Regardless,
the 2013 mine output for precious
metals will deliver a massive shock
when widely recognized.

My colleague and friend Steve St.Angelo (aks SRS Rocco) pitched in with some
astute thoughts on the global mine
output issue. It makes for a complicated
picture. What follows are his thoughts,
with my edits. The highest cost mines
in the portfolios are normally the
smallest producers of the bunch. For
example, US Silver & Gold shut
down their Drumlummon mine in Montana
because it was producing gold at $2000
per ounce. The mine was only producing
a few thousand ounces of gold annually.
Also, Golden Minerals shut down its
mine for cost reasons, but they only
were producing 5000 to 6000 ounces
of gold per year. Furthermore, Chinese
gold miners will produce 10% more
gold this year, nothing being shut
down due to lower prices. They have
a locked buyer at their own central
bank. But they have different motives,
in their best interest to keep these
mines pumping out gold bars. The first
stages of the huge gold paper price
takedown for the miners call to cut
costs and to curtail cost in mine
production processes. The industry
should see a small decrease in gold
production this year. From Rocco's
experience analyzing mining industry
in the past, it takes time before
big moves like 20% to 30% production
declines are seen. It might take until
2014 or so to happen if official prices
remain low.

My Jackass rejoinder is that many large mining firms might temporarily shut
down their own marginal mine projects,
without much notification after some
accounting chicanery and deception.
Also, some mining firms might operate
under the assumption that the Gold
price will recover quickly. They will
be slow to make big business decisions
until their hopes are dashes and optimism
crushed. Another final COMEX price
ambush, done with motive to help the
big US banks to escape their costly
wrong-sided futures contract shorts,
might be met with a broad mining firm
action to shut down many more projects,
and to reduce precious metals output.

◄$$$ SOUTH AFRICA'S MINERS CANNOT
OPERATE WITH GOLD BELOW $1500, ACCORDING
TO GOLD FIELDS. THE AUSTRALIAN MAJORS
LIKE NEWCREST ARE UNDER PRESSURE ALSO,
LOGGING MASSIVE WRITEDOWNS. THE NORTH
AMERICAN SILVER PRODUCER US
SILVER & GOLD WILL FURLOUGH ONE
THIRD OF ITS WORKERS IN IDAHO. $$$

The lower ambushed Gold & Silver prices will render so many projects as
unprofitable, that the projects will
be ordered shut down. Two cases in
point are worth discussion. Lower
mine output is the hot topic. It is
the dagger in the heart of gold market,
acting like a massive blood clot to
the industry. As supply is curtailed,
it is like denial of oxygen to the
human body. Next comes organ damage.
The corrupt bankers are so cooked,
since soon they will have exhausted
the supply. Gold Fields and Galena
are exhibits of curtailed mine output.
Gold Fields CEO Nick Holland claims
the Gold price must be at least $1500
per oz for the gold mining industry
to be sustainable in South African
operations. He is speaking from
his vantage point, the once ripe industry
locale. Holland
calls the current $1250 price unsustainable,
where vacant rationalizations will
be heard to continue projects like
sustained employee incomes. He stressed
how mines cannot keep producing when
they are losing money. Producers like
Gold Fields face a severe squeeze,
following spending programs by the
industry valued at $195 billion on
acquisitions during a decade long
price boom that peaked in 2011, when
prices reached $1900 an ounce. Since
then, the corrupt market mechanisms
went into hyper-drive.

The South Deep mine in South Africa owned by Gold Fields is one of the
few mines that could survive at the
current gold price of $1250 an ounce,
claims Holland.
The mine's size and its mechanized
operations translate into less reliance
upon labor, feature lower costs, and
result in fewer troubles. However,
continued output at the low-cost mine
is a massive waste, a squander of
the resource. Australia's biggest producer
is Newcrest Mining. They wrote down
the value of their mines by A$6 billion
(=US$5.5 bn), the biggest one-time
charge in gold mining history. Rivals
such as Barrick Gold and Newmont Mining
may be next in massive writedowns,
according to Jefferies research. See
the MineWeb article (CLICK HERE).
Thus big declines in stock valuations
will persist. The Jackass sees more
reasons to own bullion bars and coins,
rather than mining stock shares, with
each passing month.

US Silver & Gold announced last week a workforce cut by 126 personnel at the
Galena Mine in Idaho as part of cost reduction. Mining aint profitable at this artificially
low silver price. Despite 10% higher
tonnage, 19% greater output, and 8%
lower cash costs, the profit line
is a mess. President & CEO Darren
Blasutti blamed the job cuts on the
declining silver price. He said, "The
ongoing decline in the price of silver
required us to look for further cost
savings in order to be profitable
and protect our balance sheet going
forward. We have therefore taken the
difficult step of identifying additional
strategic measures that will allow
us to cut costs over the immediate
and longer term. I deeply regret the
impact this will have on our employees,
who have worked hard to help us achieve
the progress we have made." They
will implement the Small Mine Plan,
scaling back the number of operating
stopes, cut staffing from 351 down
to 221, and to put both the Coeur
Shaft and Mill in addition to several
levels of the Galena Mine into care
and maintenance mode. The company
reported the CEO and board members
will take a voluntary 20% pay cut.
with executives taking a 10% pay cut.
See the ABC KXLY article (CLICK HERE).
As paid off morons in the USGovt and
the babbling harlots on the financial
networks talk about an economic recovery,
they ignore the rising cost structure
generally, and the lower profitability
locally in the entire mining industry.

◄$$$ REFINERIES ARE THE WEAK LINK TO THE SYSTEM, THE MOST VULNERABLE ELEMENT,
AND THE LIKELY POINT OF FAILURE IN
THE GOLD MARKET. THE SUPPLY LINE TO
THE REFINERS IS INADEQUATE, THE NEW
CHOKE POINT. $$$

After a few fruitful conversations with The Voice concerning the breakdown from
rising demand and falling supply,
some light was shed on a key weak
link for the gold market. The refiners
are a choke point. They provide the
high volume supply to the market exchanges
and the biggest retail sellers. Demand
cannot be met unless refiners produce
gold bars. No matter whether from
mine output or recast bars. Refiners
cannot produce the required supply
undless the mining firms deliver on
their site output. A growing volume
of the refiner activity is satisfying
orders from the big vaults and brokers,
who are also busily engaged in recasting
of older bars. Much of the recast
work is to conceal central bank leasing
of gold. The banks (sellers) wish
to hide their tracks and criminal
deeds. The investors (buyers) wish
to make their trails clean with a
fresh start, even to give the appearance
of being supplied by the more pristine
sources. The investors seek plausible
deniability, except for bold types
like William Kaye, who admits his
bars in Asia are from leased central banks.

◄$$$ SURE WOULD BE NICE TO SEE A MINING INDUSTRY STRIKE. IT WOULD MAKE
PERFECT BUSINESS SENSE. $$$

The Gold & Silver mining firms face fierce profit pressures. They would
be very unwise to squander their best
and lowest-cost projects with continued
production. They will slowly shut
down the marginal projects, which
might make tiny profits, no profits,
or lose small money. The paper gold
price schemes will work against the
mining firms in a fierce way. The
mining firms collectively could declare
a strike of sorts against the Wall
Street bankster gangsters. They
could first shut down many more projects.
They could second deny output to the
COMEX and GLD funds, both snake pits
of bank criminality. They could
turn instead to Asian bullion buyers
in direct defiance, and justify the
move as seeking the best price.
Boycott remains an effective business
technique.

◄$$$ PURE SPECULATION THAT CHINA MIGHT BUY BARRICK GOLD.
ALTHOUGH THE TARGET IS RIPE, THE OBSTACLES
ARE VISIBLE WITH THE CANADIAN GOVT
APPROVAL, AND HIDDEN WITH ANGLO BANKER
DIRTY SECRETS DESIRED AS KEPT BURIED
LIKE ORE. $$$

China is aggressive with gold, growing their official gold
reserves, inducing their citizens
to own gold, retaining the full national
output from their mining industry,
importing through the Hong
Kong door, and establishing gold exchanges.
The extent of the nation's gold
appetite is reinforced by realizing
that the pace of Chinese gold demand
is equivalent to 50% of world mine
production. China must continue to source its demand with
secure adequate supply. Doing so has
become a national priority. They
have recently revealed their strategy
in a string of recent acquisitions.
Next comes a bold acquisition of one
of the major gold miners. The stock
valuations and market capitalization
of the gold mining firms are at historic
lows, at levels not seen since the
Global Financial Crisis in 2008. The
struggle to maintain profitable operations
in the face of corrupt and artificially
low official precious metals prices.
The Canadian miner Barrick Gold is
vulnerable. It boasts 140 million
ounces of proven and probable reserves,
7.3 million ounces of annual production
from 27 mines in nine countries, and
US$2.3 billion in cash. However
its low share price sets its market
cap of a mere $15 billion. To
its favor, Barrick is larger than
its competitors, more geographically
diversified, and one of the lower
cost producers on an all-in cost basis.
On the detrimental side, they lead
the industry with a massive debt burden.
They also have used consistent deceit
in describing their large hedge book.

The gold reserves in the ground at Barrick are alone
worth about $180 billion at current
prices. The mining firm presents a tempting
target for China, given its oversized $3 trillion savings
account. Although it might surprise
the market, an acquisition of this
sort is very plausible. Two recent
attempts by foreign firms have occurred
to acquire large Canadian corporations,
one successful and one not. The two
Canadian target companies were oil
& gas giant Nexen and fertilizer
firm Potash Corp. On a simple precedent
basis, an attempt by China
to acquire Barrick might lead the
Canadian Govt to approve the deal.
Like Nexen, mining operations at Barrick
are largely outside of Canada and spread diversely around the world.
Little direct impact could be cited
against Canadian natural resource
ownership and security. By contrast,
the Potash Corp deal involved large
scale deposits of a critical global
resource located within Canadian borders.
See the Kitco article (CLICK HERE).

More recent distress comes from the Pascua Lama project on the Argentine border
of Chile. The remote project has been a giant sink
for invested capital, not to be repaid.
It leaves Barrick vulnerable to takeover
from a different angle, assumption
of debt. The firm surely does not
wish to write down this project, a
gem on its balance sheet. Yet the
Chinese might seize the moment and
capture it in a publicized rescue,
rendering themselves the knight on
the white horse. In the process of
acquistion, China
could actively dump USTreasury Bonds
used in the buyout. In the trade
the practice is called Indirect Exchange,
a very deadly practice coming to New York and WashingtonDC. The USTBonds are
coming home for redemption, as in
Return to Sender. The Rosneft acquisition
of TNK-BP from British Petroleum is
another example of the nasty Indirect
Exchange dump of USGovt debt, having
turned toxic.

The hidden factor is the biggest factor in the Jackass view, a potential obstacle.
Barrick has a long history of deep
collusion with the central banks,
including maintaining a gigantic scummy
hedge book that refuses to go away,
despite two truly massive secondary
stock offerings in recent years.
The origin of Barrick is replete with
executive and board posts filled by
bankers, including some US security agency wonks.
Barrick holds many secrets deems never
to be told. Therefore, look for China
to approach other large global mining
firms for acquisition, unless they
wish to make a frontal assault at
the Anglo-American bankers with a
play for Barrick Gold.

◄$$$ BARRICK IS ON THE EDGE OF THE ABYSS. ITS FAILURE MIGHT BE 10 TIMES
MORE DANGEROUS THAN LEHMAN'S DEATH,
DUE TO POTENTIAL EXPOSURE OF PAST
DEEDS. THEIR HEDGE BOOK IS A LITANY
OF LIES AND CORRUPT EVERGREEN CONTRACTS.
THE DEFAULT INSURANCE LOOKS LIKE A
DEATH EVENT IS BEING TELEGRAPHED.
$$$

Rob Kirby pitched in. He said, "The Powers that be might want to be
a bit careful about making a public
spectacle failure of Barrick. Many
bones are buried in the graveyard
of Barrick's hedge book. Also disclosure
of their Evergreen contracts would
be high risk, where they leased Central
Bank bullion that never had to be
repaid. Piss the wrong people off
and details might emerge that make
Snowden look like grade school tattle-tale
piker." See the graph above
for the Credit Default Swap contract
on Barrick Gold. It looks much like
Lehman's did in the summer of 2008
before it croaked, or was killed.
The failure of Barrick Gold could
become a quintessential turning point
in a grand backfire, an industry response
to controlled corrupted Gold price.
To be sure, the Pascua Lama legal
impediment has created a grand complication.
One must wonder if the Chilean Govt
smells a rotten vulnerable giant,
and wishes to attack the Anglo bankers.

◄$$$ MORE TROUBLES FOR BARRICK GOLD AT PASCUA LAMA, AS FURTHER DELAYS
ARE ANNOUNCED. AT RISK ARE LARGE RETAINED
EARNINGS, AS BIG WRITEDOWNS LOOM OVER
THE EMBATTLED FIRM. THE LOWER GOLD
PRICE AND LEGAL WOES FOR BARRICK PRESENT
A SYSTEMIC RISK THAT COULD EXPOSE
20 YEARS OF CRIMINAL ACTIVITY WITH
WALL
STREET. $$$

The troubled Pascua Lama project is (was) scheduled to produce 800,000 to 850,000
ounces of gold per year in the first
full five years of its 25-year life.
It was scheduled to start production
in the second half of 2014. But Barrick
has announced an important delay,
now looking at late 2015. Its capital
costs will be higher, as project cost
estimates have been raised to $8.5
billion. China could be planning a bid for Barrick very
soon, just to shake things up in the
banker world. If smart, if they might
seek a bargain basement price on cheap
assets by waiting for bankruptcy.
They could buy the assets at the auction,
and cause an international uproar
if blocked. The could actually threaten
to dump USTBonds if not given the
right to acquire. They might deny
rare earth metals to the United States if not given
the right to acquire. They might halt
Apple i-Phone exports if not given
the right to acquire. They might collude
with Saudi Arabia to accept non-US$ oil payments if
not given the right to acquire.

The lower gold price plus the legal challenges at Pascua Lama might have made
for a gigantic backfire for the bankers.
The firm could face severe capital
problems, even face bankruptcy. The
event would reveal a litany of past
crimes, collusion, and corrupt practices,
like selling gold to Wall Street what
they cannot produce, with no intention
of supplying it, like leasing central
bank gold with no intention to replace
it. The legal entanglements in
Chilean courts are a true nightmare,
una pesadilla! See the Mining.com
article (CLICK HERE).
Retained corporate earnings are at
risk of vanishing like a cold breeze
on the High Andes. Project writedowns
will have the same effect financially
as a Utah landslide. See the Financial Post article
(CLICK HERE).
Furthermore, Barrick Gold plans to
overhaul its board of directors in
the wake of a backlash from powerful
shareholders, the Canadian pension
funds. The Globe & Mail reported
the insurrection that hopes to eliminate
lavish perks in the slush fund that
is known as Barrick executive compensation.
An April vote opposed a US$17million
salary for the company's new Vice
Chairman John Thornton and $multi-million
payments to directors Peter Munk and
Brian Mulroney. The company faces
a wake-up call for the chairman of
vice and his henchmen.

◄$$$ BARRICK STOCK IS HEADING TO $10/SHARE. MORE DREADFUL NEWS IS COMING
SOON. BARRICK WILL BE FORCED TO UNWIND
ITS HEDGES DUE TO LACK OF PRODUCTION.
THEIR SUPPLY OF THE G.L.D. EXCHANGE
TRADED FUND HAS BEEN CURTAILED. THEREFORE
THE FUND WILL BE DRAINED RAPIDLY.
$$$

The Barrick Gold stock share price (ABX) hit a new 52-week low. It appears headed
to challenge the $10 level. Given
the lower output from smaller marginal
projects and the big threat from Pascua
Lama, the mining firm will be forced
to unwind hedges. When no physical
mine output can be delivered against
future obligations under contract,
those contracts must be covered and
bought back. Ironically, Barrick
might trigger the long-awaited rally
in the COMEX gold price in a grand
backfire, certain caustic flatullence
in the banker eyes. Many smart analysts
expect the SPDR Gold Trust (aka GLD
fund) will be drained quite soon and
quite significantly. The Barrick bond
default insurance is sure to rise
further in cost, if and when the hedge
book gains more attention. The gold
bars and coins look much better in
ownership than toxic Barrick paper,
either equity or bond.

◄$$$ GRASBERG IS BACK ONLINE FOR ITS OPEN PIT MINING OPERATIONS. THE TUNNEL
WORKS ARE STILL OFFLINE, WHICH ACCOUNT
FOR 20% OF OUTPUT. THE INDONESIAN
GOVT STILL BLOCKS THE TUNNEL NETWORKS
FROM PRODUCTION. $$$

More supply is coming back online, but large amounts remain captive out of production
still. The giant Indonesian mine has
returned to mining operations in its
massive open pit. However, the tunnels
remain shut down due to the chronic
safety problems and wall collapse
events. They make for 20% of output
at the huge mine. So Grasberg is 80%
back online, which will aid in global
gold supply. See the Bloomberg article
(CLICK HERE).

##
GOLD VAULTS GOING EMPTY

◄$$$ A SAVAGE LOSS OF GOLD IN PRIMARY VAULT LOCATIONS IS BEING RECORDED
ACROSS THE ENTIRE WORLD. THE SHORTAGE
OF SUPPLY IS ACUTE AND GLOBAL, WITH
A PATTERN. THREE CANADIAN FUNDS DO
NOT PARTICIPATE IN CORRUPT PRICE GAMES.
$$$

The chart below tells a vivid story. The declines have been extraordinary in
physical gold holdings in the global
Exchange Traded Funds. However and
in stark contrast, a zero percent
reduction of physical gold is recorded
for both the Central Fund of Canada and the Sprott Gold
Trust during the entire vicious decline
in gold. They do not play the
gold suppresion game. The lesser known
Canadian Central Gold Trust (GTU)
also showed a 0% reduction in inventory.
The ETFunds are the provincial
grounds of harlots serving Wall Street
and London bankers. The devoted corrupt accomplices permit the raids
to investor gold held in inventory,
thus betraying their investors, who
did not bother to read the prospectus
carefully. The three Canadian funds
are as solid as a rock. It is not
clear that the CEF permits metal withdrawals,
but the Sprott Fund does permit them.
Neither fund participates in collusion
with the gold market ambushes. The
day will come when these honestly
run funds will be the primary destination
for mined gold, paying a premium.

◄$$$ COMEX GOLD IS BEING DEPLETED. THE MAIN DAMAGE IS THE REGISTERED ACCOUNTS,
WHICH ARE FROM CLIENTS WHO ARE LIKELY
ARE LOSING FAITH AND TRUST WITH THE
MAIN BANKS LIKE JPMORGUEN. IN A FEW
MONTHS, ALMOST NO REGISTERED GOLD
WILL BE IN THE OFFICIAL VAULTS. LEMONADE
STANDS WITHOUT LEMONADE FAIL AS A
BUSINESS. $$$

Registered accounts are ready and available for COMEX delivery. Eligible accounts
contain gold bars that conform in
size and quality to become Registered.
Clearly, the clients of the COMEX
are losing trust and confidence at
a rapid rate. They see up close the
criminal activity, principally by
JPMorguen. Before long, the COMEX
will be more isolated, with main clients
abandoning their shell game congame
fraud scheme. On a single day, the
JPMorgue shed an incredible 66% of
Eligible gold in its vault, as clients
vacate the premises. See the Zero
Hedge article (CLICK HERE).

◄$$$ JPMORGUEN IS VERY LATE IN JUNE SILVER DELIVERIES. THEIR VAULTS CANNOT
MEET THE VOLUME OF DELIVERY DEMANDED.
CONTRACT FRAUD IS OBVIOUS. THEREFORE,
THE BIG BROKEN CORRUPT BEHEMOTH BANK
IS EATING ITS SHELVES. $$$

The Jackass is grateful to Turd Ferguson for passing the information, and to
Harvey Organ for serving as the watchdog
with pen in hand. In all, JPMorguen
received 5024 formal Delivery Notices
for the June gold contract at the
COMEX. Harvey
cannot find any iota of evidence that
indicates JPM has settled any of them.
Here we are in late July. That amounts
to 502,400 troy ounces that must come
from their Dealer or Registered side.
In a recent inventory tally check,
the JPM vaults only contained 390,000
ounces. Abiding by legal contract
is not something the big corrupt bank
is burdened by, not in the modern
era. A big withdrawal of Eligible
gold appears to have finally satisfied
the requirement JPM had standing for
May Delivery. Organ cited 43,000 ounces
of Eligible gold and an outsized 112,000
ounce shortfall in Registered gold.
The gold is gone! The controversy
could grow leaps and bounds if JPMorguen
settles everybody at the bid in cash,
similar to what ABN AMRO did in April.
Yet more price ambushes from hammers
at the COMEX could be executed in
order to 1) Dissuade August contract
holders from standing for delivery,
and 2) Create a cascade of GLD ETFund
sell orders which they can use to
raid the GLD for the tonnage in satisfaction
for August and the leftover 112k ounces
from June. Organ said, "The
entire fractional reserve bullion
banking scheme is unraveling before
our eyes." True datt!

◄$$$ EVIDENCE POINTS TO JPMORGUEN HOGGING ALMOST ALL THE JULY SILVER CONTRACT
DELIVERIES. THEY HAVE TAKEN 90% OF
DELIVERIES TO THEIR OWN ACCOUNT. JPMORGUEN
HAS VASTLY REDUCED ITS NET SHORT POSITION
IN SILVER. IT APPEARS THAT THE HOUSE
OF MORGAN IS EXITING THE SILVER MANIPULATION
GAME, A BULLISH SIGNAL. $$$

The TFMetals Report with Turd Ferguson has been all over the story in reporting.
On the London scene of the crimes,
Andrew Maguire has been noting for
about the past three weeks, a large
institutional buyer has appeared at
every London Silver Fix. Due to the
order size, this buyer could only
be a Bullion Bank. He has deduced
that is likely JPMorgan Chase.
If true, then suddenly JPM has been
acquiring as much physical silver
as they can, as secretly as possible.
Conclude they are out of silver in
their inventory.

Ted Butler has been tracking JPMorguen like a hunting dog at the COMEX. He wrote
the following. "I believe
the statistics from the first six
days of the July COMEX silver futures
contract provide enough data for attention.
The standout feature for the first
week of deliveries against the July
silver contract indicates that JPMorgan
has taken roughly 90% of the metal
offered for delivery, or a total of
1637 contracts out of a cumulative
total of 1828 delivered so far.
In turn, of the silver contracts stopped
or accepted by JPMorgan, 90% (1479
contracts) were for JPMorgan's own
house or proprietary trading account.
In other words, JPMorgan took delivery
of roughly 7.4 million ounces of silver
in the COMEX warehouses for their
own benefit and risk." The
monster has become a hog at the London trough.

Butler provided an update shortly afterward.
The trend continued, to bring the
total contracts delivered in the July
silver contract to 2220. JPM took
2006 of them, including 1829 into
their own house account, a ripe 90.4%
overall and 82.4% into the account.
Butler
raised the question of JPM double
dealing, since JPMorgan customers
have delivered close to 200 silver
contracts. With over 1800 contracts
going into its own named accounts,
JPM has gone above the 1500 contract
limit imposed by COMEX, for a single
trader in a single delivery month.
One more rule the big corrupt bank
avoids in prosecution or enforcement.
A few days ago, about 1200 July contracts
remain to be settled. It bears repeating.
Of the 2220 contracts for July Silver
that have been settled so far this
month, JPM has claimed over 90% of
them. Furthermore, they have gone
mostly into the JPM house account.

JPMorguen is soaking up as much COMEX silver as possible. JPM appears each day
at the London Fix, buying up as much
silver as possible there also. One
must always doubt any substance behind
a CFTC warning. By volition of
coercion, JPMorguen is exiting the
silver manipulation game. Over the
past nine months, JPM has reduced
their naked short COMEX position from
roughly 35,000 contracts down to about
15,000 contracts. Given that the
Other Commercial ledger item listed
at the exchange is net long between
40,000 to 60,000 contracts, JPMorguen
as the market backstop is prohibited
from reducing their naked short position
to zero. TFMetals concludes that JPM
has three options, the third being
what appears to be their chosen action
route. They can 1) Cover the remainder
of a large number of Silver short
contracts, and do so into rising prices.
They tried that in 2011 and it caused
a massive price spike toward the $50
mark. 2) Go the so-called potato route
and simply default on delivery, sure
to invite a skein of lawsuits. 3)
Continue to cover the naked shorts
in piecemeal manner, but also acquire
as much physical silver as possible.
Deliver on contracts late, and coerce
many to settle in cash. Option #3
is the current tale of the tape. The
corruption is becoming far more open
and visible. Such is the way of the
COMEX & LBMA criminal bank management
as 2013 moves along, from crisis to
crisis rapidly.

Henry Bath & Son Ltd (owned by JPMorgan Chase) requested the London Metal
Exchange to delist 21 of its warehouses
and storage facilities with immediate
effect. Five warehouses in Baltimore, three in Liverpool, six in Rotterdam,
and two in Bilbao
Spain, were delisted. Henry Bath also had other
warehouses delisted, namely two in
Singapore,
and others in Chicago,
New Orleans, and
Busan South Korea. This news all according to the London Metals
Exchange. See the Bloomberg article
(CLICK HERE).
The news can only mean one thing,
cost reduction since almost no metal
available in inventory. The hints
have become obvious to a blind man.

◄$$$ JPMORGAN CHASE AND GOLDMAN SACHS ARE SEEKING TO SELL THEIR METAL
WAREHOUSING UNITS JUST THREE YEARS
AFTER A CONTROVERSIAL ENTRY TO THE
INDUSTRY, EVEN AS A PROPOSED RULE
CHANGE BY THE LONDON METAL EXCHANGE
IS LIKELY TO REDUCE THE ATTRACTIVENESS
OF THE BUSINESS. INSIDERS HAVE BEEN
LODGING COMPLAINTS ABOUT DELAYS, PROFITEERING,
AND FRAUD. $$$

The two giant US banks (corrupt pillars at the syndicate gate) entered the niche
warehousing business in 2010 at a
time when fast rising inventory stocks
was the norm. The financial crisis
triggered a boom for storage companies.
But their ownership of warehouses
struck a nerve when metal users filed
regular and frequent complaints, charging
the companies were profiting from
bottlenecks in the system that distorted
prices. The JPM & GSax fraud was
clear to the insiders. Both firms
have informally sounded out buyers
for their warehousing subsidiaries
in recent months. Some blame has gone
to tougher regulations, if not greater
competition, but the real story ties
to acknowledged fraud on a systemic
basis. The central banks have begun
to review the practice where banks
own warehouses, but have a stake in
the futures contract game with oversized
positions. See the Financial Times
article (CLICK HERE).
Again the hint, no gold in inventory.

◄$$$ JPMORGUEN AND GOLDMAN SACHS HAVE BEEN CHASED OUT OF THE ASIAN METAL
STORAGE BUSINESS. THE HK-OWNED LONDON METALS EXCHANGE HAS A RIGID CRACKDOWN AS
AN AGENDA. THE APPARENT REASON STATED
IS TO REMOVE BOTTLENECKS IN DELIVERY.
FEE GAUGING IS COMMON IN FOOT DRAGGING
DURING METALS IN MOVEMENT THAT OBSTRUCTED
TRUE PRICE DISCOVERY. $$$

By all appearance, the new LME Chinese-based owners have let their presence
be known right away. They are kicking
ass and taking names in the metals
warehousing sector. The LME ownership
has decided to use itself as leverage
to influence the warehousing practices.
Some legitimate rationale has been
used to clear some of the corruption
in the gold ramps. They wish to remove
bottlenecks in slow metal delivery.
The delays are to enable fee gauging,
much like check kiting for the unstated
motive to earn more from a captive
client base. In taking action,
the new owners have imposed an easy
reform. The LME's proposed rule change
takes aim at bottlenecks that slow
the delivery of metal from the warehouse.
Even when they are full, like in recent
weeks, long queues develop to move
metal from one location to another.
The delays have been profitable
for warehouse owners, since the rent
continues to apply until metal actually
leaves. The new rule would prevent
this practice, in effect forcing stocks
at the most dominant warehouses to
be drawn down, eliminate the extra
rent paid. Other warehouse owners
with large LME stockpiles, including
traders Glencore and Trafigura, would
also be affected. "The LME
has cratered the valuations of these
companies," said one rival
trading house executive, referring
to JPMorgan and Goldman Sachs. The
proposal will remain open to consultation
until September. It marks a step toward
reform at the LME, following its acquisition
by Hong Kong Exchanges & Clearing
in December. Before then, the LME
was owned by banks and brokers, with
JPMorgan and Goldman as the two largest
shareholders.

My friend and colleague Aaron Krowne offered an interpretation. He said, "To
any who need the dots connected, precious
metals warehousing with its anomalous
lengthy delays (100+ days to withdraw
metal, as recently reported), has
become a key manner in which the wholesale
PMs market has been kept dysfunctional.
Delay and shortages develop to
keep overt price impact muted and
to prevent a feedback loop of wholesale
(and downstream retail) demand from
rightly boosting the main precious
metals price benchmarks. Of course,
this practice would tend to boost
the apparent warehouse stocks as well.
If there were any questions about
whether the Chinese would be content
to sit back after purchasing the LME
and to let the game be played as it
was before, with the Western banking
cabal continuing to distort and exploit
virtually every corner of the precious
metals market, this should answer
it. I have rarely seen anything like
this. The top two trading banks,
JPM and GSax, fleeing with their tails
between their legs, as an exit
from a sector after a mere three years."
The great game is changing, and momentum
has shifted. See the Implode-Explode
article (CLICK HERE).

◄$$$ JPMORGAN VAULTS ARE GOING EMPTY OF GOLD BARS LEAVING FAST AT THE
COMEX, AS ARE BRINKS VAULTS. THE VAULTS ARE ONE
CHASE MANHATTAN
PLAZA ARE
GOING BARE. $$$

In the first week of July, the JPMorgan vaulted gold volume dropped to a record
low. The Brinks vaulted gold actually
plunged by 24% in a single day. These
are historical declines in available
gold bars never seen before in modern
history. While record amounts of
paper gold are sold, the actual physical
holdings held by official COMEX vaults
continues in a steep decline. The
JPMorgue disconnect is being publicized,
between the epic delivery requests
and its reported scant gold holdings.
In a recent COMEX update, another
6800 ounces of gold was pulled from
the world's biggest gold vault owned
by JPMorgan at One
Chase Manhattan
Plaza. Their
total gold inventory reached a fresh
record low. Bear in mind that the
Commodity Exchange Inc disclaims all
liability whatsoever with regard to
its accuracy or completeness. So false
data should be assumed, as in worse
than reported. See the Zero Hedge
article (CLICK HERE).
As for the JPMorguen fire, put aside
the big concerns of arson to cover
their paper gold certificate tracks.
The fire originally was supposed to
be at the main One Chase Manhattan
address where the big vaults are located.
According to the Fire Dept of New
York, instead the fire was at 15 Broad Street, the site of the JPM former headquarters. This is a
non-story with a lot of smoke, despite
conjured thoughts of connected tunnel
systems. See the Silver Doctors article
(CLICK HERE),
which include corrective updates.

◄$$$ LONDON IS ALREADY OUT OF GOLD AT THE LONDON
METALS EXCHANGE. LONG DELAYS IN DELIVERY
ARE THE NORM, WITH OFFERS TO ESCAPE
THE LINE IN QUEUE BY TAKING CASH SETTLEMENT.
THE BANKSTERS ARE BACK INTO DESPERATE
MODE, JUST LIKE IN APRIL. IT WILL
BE HARDER TO CONCEAL THIS ROUND. THE
DELAYS ARE MET WITH CASH SETTLEMENT
THREATS, BUT WILL SOON BE MET IN RETURN
WITH LAWSUITS FOR CONTRACT FRAUD.
$$$

The term check kiting applies, but magnified to the extreme. Fraud is being
confirmed in the open at the London
Bullion Market Assn. Clients at the
metals exchange pay good money upfront,
but are forced to wait over 100 days
for delivery on bullion Gold &
Silver orders. The delivery schedule
must accommodate the London bankers to find the bars at source, since all fingers point
to empty official vaults. Only one
conclusion can be arrived at: the
LBMA has no Gold or Silver. The rampant
criminality in bullion markets becomes
more apparent even to outside observers.
The official babble excuse is that
delays are due to warehouse queues
and paperwork in compliance (like
asking for the client's wife's maiden
name). Heck, it is an easier process
with long lines to secure a new I-Phone.
So juxtapose the long delays in delivery
with the propaganda of a bear market.
When supply does not exist, the official
COMEX price is therefore not the equilibrium
market price. The Gold market is corrupt
to the core. The entire Western economy
transformed into Just-in-Time Inventory
management long ago. The bankers need
more thefts (see MF-Global), more
raids (see GLD Fund), more wars (see
Libya), more smuggling (see Congo), and more colonization (see Mali) in order to keep up
with gold demand. The German Govt
repatriation demand changed all!!

The implication is quite clear, as the three month wait
is typical for final multi-step door-to-door
delivery from mine locations of fresh
dory bars to refiners, who cast the
concentrated metal into gold bars,
which is then shipped to the London market. A deep irony is at work. In the past
two decades, the big mining firms
used to forward sell their Gold &
Silver in elaborate hedging strategies.
They are all wrecked books as deep
with red ink as the mine shafts were
deep in coughing up metal ore. Nowadays,
banksters are effectively forward
selling the gold and silver of these
mining companies in real time, as
customers wait for the shipment from
the mine source. In most cases,
the bullion bars does not yet exist.
In other instances, refiners are requested
to recast stolen bars from Allocated
Gold Accounts like from the German
account, or from wealthy Central European
familes. The recasting covers the
criminal tracks. The futures contract
holders who take Delivery are essentially
forced to accept a rollover contract
three months forward, or else be black-balled
by the exchange officials in reprisal.
Think check kiting, with zero interest
paid on already invested funds. The
banksters enjoy free use of buyer
money for that period, no apologies,
no certificate of gratitude worth
a five-star restaurant dinner either.
Worse, the customers are told quietly
and individually of their only recourse
option, cash settlement. Thanks to
Jeff Nielsen for some sage thoughts
on the London
story.

EuroRaj added some thoughts. Precious metals are going into hiding fast, as
the paper gold market is being destroyed.
The supply chain will be wrecked,
which will resurrect the gold market
on the physical side from the ashes
of burned paper. The inescapable trend
showing itself is that big paper market
price declines (ambushes) mean the
paper markets are dying quite rapidly.
The ransacked GLD fund should collapse
very soon. At these prices, the miners
are bust and supply is shut in as
projects are put on hold. The bullion
merchants will be buried, as they
cannot obtain supply, nor can they
handle this kind of volatility. The
jewelry premium will surge as that
will be the only gold available. There
is no bottom to this market as there
is no proper mark for the market.

◄$$$ MORE MAGUIRE, MASSIVE OUTFLOW FROM THE LBMA THREATENS THE FINANCIAL
SYSTEM. THE FLIGHT OF GOLD HAS REACHED
INCREDIBLY HIGH VOLUMES. IN DEFENDING
THE FOREX AND SOVEREIGN BOND MARKETS,
GOLD MUST BE PUT IN PLAY BY THE MAJOR
CENTRAL BANKS. IT IS TREATED BY THE
CENTRAL BANKS AS CURRENCY (DEEP HIDDEN
IRONY). THE PRACTICE EXPOSES THE SUPPLY
FOR QUICK REMOVAL, WHICH IS GOING
TO EASTERN ENTITIES IN HISTORICALLY
UNPRECEDENTED VOLUME. MAGUIRE BELIEVES
THE TRANSFER OF LBMA GOLD OUT OF LONDON THREATENS THE ENTIRE WESTERN BANKING SYSTEM.
THE EASTERN ALLIANCE
IS WORKING HARD ON A FORMIDABLE REACTION,
A COUNTER-ATTACK. $$$

Andrew Maguire provided some juicy information of the massive outflows. He sees
a massive transfer of physical underway
into Eastern (Asian) locations. He
accused the April and June gold market
declines of being absolutely conducted
by the USFed. The immediate goal was
to bail out the defaulting bullion
banks. The ABN AMRO refusal to honor
gold accounts exposed the whole LBMA
system to a probable default, causing
a major crack in the system. The gold
ambush followed right away. Maguire
concluded, "The result of
this official intervention is clear.
There is a tradeoff involved here
because it tipped the balance and
irreversibly broke the relationship
between the paper markets and the
global physical markets now. The
majority of all traded volumes are
actually paper gold in the far less
transparent Over-The-Counter foreign
exchange markets." He accused
the master minds in the paper control
centers for the gold market to be
the USFed and the Bank for Intl Settlements
in Switzerland.
A clear unequivocal accusation. In
fact, the CME hiked the gold futures
contract margin requirement after
the June ambush. The 25% margin hike
would make no sense, except to aggravate
the price suppression, not to bring
order to the futures arena.

Maguire went on to explain the internal dynamics of the extreme dislocations
that are addressed and treated in
the magnificent ambushes. The banker
treatment of Gold is just like a currency
in the elaborate defenses, but they
deny Gold is a currency, what is a
blatant contradiction always made
in public. He said, "You
have to understand that gold/currency
crosses are the primary focus of these
official interventions that we
see daily. In other words, unlike
all other commodities, Gold &
Silver are first and foremost a heavily
central bank manipulated market, and
are traded as a foreign exchange
cross. But here is the rub. This
has created a huge problem for the
central banks. As a tradeoff in supporting
the dollar, it forces the shorting
of Gold, which then in turn leads
to the Eastern central banks exercising
the other side which is their long
Gold side. They convert that into
real physical allocations at the daily
precious metals fixes in London." The new strain, far more than
a wrinkle, is that in the past the
swapping was a nuisance. The gold
bars could easily be borrowed and
later replaced. However, these past
few months, the sheer volume of bullion
being transferred out of the LBMA
has become a major threat to the Western
central banking system, in his words.
He has never described the ominous
situation in such dire terms before.
He described an untenable bind for
the USFed, which must prop up the
fiat paper currencies in the FOREX
and the Bond markets to prevent a
global crash. But in doing so, he
and his banker masters open the door
very wide for the Eastern entities
to take transfer of gold wealth.
Thus the grand shift of wealth eastward.

Witness the greatest transfer of wealth in the history of the world, all to
sustain a corrupt and fraudulent paper
currency system, all to keep a banker
syndicate in power, all to enable
grand $trillion thefts. The world
is in the process of reacting on numerous
powerful fronts, from dismissing the
USDollar as global reserve, to working
toward the castoff of bankers into
secret prisons. The demand for physical
gold has never been higher from his
standpoint. See the King World News
interview (CLICK HERE).
A confirmation opinion is given by
Keith Barron. He consults with major
companies around the world and is
responsible for one of the largest
gold discoveries in the last quarter
century. Available gold supplies are
disappearing as the gold price declines,
and the conflict intensifies in the
gold market. See the King World News
interview (CLICK HERE).

◄$$$ VOLUME OF GOLD TRANSFERRED CLIMBED TO 12-YEAR HIGH IN MAY. THE LONDON EXCHANGE IS HERMORRAGING GOLD. THE PROCESS IS TRANSFORMING THE
WEST INTO A DE-INDUSTRIALIZED THIRD
WORLD. THE EXHAUSTION OF LONDON
GOLD SUPPLIES IS GREATER THAN FOR
SILVER SUPPLIES. $$$

The amount of gold transferred between accounts of London Bullion Market Assn
members rose sharply in May while
the amount of silver transfers declined.
The LBMA releases clearing statistics
each month on the net volume transferred
among members accounts. Interpret
most to be going out of the system,
not staying within it. Details are
amazing. Total gold transfers rose
by 17.2% to a daily average of 28.2
million ounces, the most in 12 years.
Strong increased physical demand for
gold has come in response to falling
prices, particularly from India and China. The average daily value of gold transfers
topped $39.8 billion, the highest
level since August 2011. A record
high was seen in April. Deals have
grown in average size to 5539 gold
ounces per transfer. The story for
silver is not as robust. In April,
a 16-month high was realized in transfers.
The latest data shows a 13.7% decline
from those highs, to a daily average
of 142.6 million silver ounces. The
May volume is still around 6 million
ounces above the monthly average over
the last 18 months. The value of silver
traded is down 21% to a daily average
of $3.28 billion, the lowest level
since last October. The number of
transfers rose to an average of 1027,
the highest level in two years. Notice
that the average daily volume in Gold
at $39.8 billion is at a 12:1 ratio
to Silver at $3.28 billion, despite
a metal prices at over a 60:1 ratio.
See the Kitco article (CLICK HERE).
Sales of coins have been almost even
in value volume for two years. The
pressure is on for convergence to
10:1 ratio in price. Eric Sprott points
out that the mining output has a 11:1
ratio.

◄$$$ THE G.L.D. FUND INVENTORY DEPLETION COULD DICTATE THE BOTTOM IN THE
CORRUPTED GOLD PRICE. THE COMEX IS
PUSHED DOWN FROM ACTUAL SUPPLY BEING
DUMPED, AS WELL AS THE NAKED FUTURES
CONTRACT SHORTING. REDUCED MINE OUTPUT
THREATENS TO EXPOSE THE CRIMINAL RAIDS
OF THE GOLD EXCHANGE TRADED FUND.
THE G.L.D. EXCHANGE TRADED FUND IS
BEING DRAINED BY ALMOST THE EXACT
AMOUNT THAT THE GOLD CONTRACTS ARE
BEING MET FOR DELIVERY DEMANDS. $$$

The SPDR Gold Trust (aka GLD fund) went below 1000 tons of gold in inventory
in the last month. It is being whittled
down by ten or more tons almost every
day. Two factors are important to
describe the drawdown in its inventory.
The big US banks are shorting the GLD shares, helping
themselves to the inventory. But also,
and a phenomenon not reported or perceived
much, is the reduced quantity of Gold
in Motion. The reduced mine supply
has not been in a position to keep
the GLD fund replenished. The entire
SPDR Gold Trust is an elaborate hoax,
to provide investors an opportunity
to own Gold in Motion, which never
rests in a vault, always en route
from the mine source.

The hoax is apart from the basic fraud of the fund, which serves as a Gold Bullion
Central Bank that is pilfered by the
big US
banks on a regular and frequent basis.
They suppress the gold price with
shorted (leased) GLD gold bars, and
profit from the shorted shares from
their own corrupt practice. They cover
their futures contracts held net short
for profit, and cover their GLD shorted
shares for profit, making money coming
and going, all highly illegal. Note
also that the infamous Bar List from
the SPDR Gold Trust has been revealed
as a grand fraud, highly inconsistent,
even redundant with duplicate serial
numbers. The regular inconstencies
are further proof of the fund being
Gold in Motion. The GLD drainage in
June was almost exactly equal to what
is standing for June Delivery. This
is fraud, since there are no coincidences.
Harvey Organ is all over this story.

##
BROKEN RANSACKED GOLD MARKET

◄$$$ CHINESE GOLD IMPORTS ARE ACCELERATING, THE PACE GAINING. THE IMPORTS
ARE DOUBLING EACH YEAR ON A NET BASIS.
WEALTH IS MOVING FROM WEST TO EAST,
WHILE THE WEST SINKS IN A SEA OF TOXIC PAPER
SWEPT BY INSOLVENCY, FRAUD, AND CORRUPTION.
WHEN PEOPLE THOUGHT THE CHINESE PACE
COULD NOT BE SUSTAINED IN 2013, IT
HAS DOUBLED AGAIN IN AMAZEMENT. $$$

◄$$$ OUTSPOKEN HONG KONG HEDGE FUND MANAGER WILLIAM KAYE DISCUSSED THE
MISSING USFED AND GERMAN GOLD, AND
WHERE IT HAS GONE. IT IS RECAST AND
SOLD TO EASTERN
ENTITITES. HE BELIEVES THE PEOPLE'S
BANK OF CHINA (PBOC) REALLY OWNS MULTIPLES MORE GOLD THAN
ADMITTED. $$$

Fund manager William Kaye has been extremely outspoken and bold on the gold
world, as it relates to Asia. What follows are his views, my edits. The Asian region is changing
fast. The Chinese are positioning
themselves to be the leading global
power over the next five to ten years.
His sources tell that contrary
to the available official data, China
has between 4000 and 8000 tons of
physical gold held in reserves (confirms
what my source says, except The Voice
claims over 10,000 tons). They
are not only the largest producer
of gold, and the world's largest importer
of gold. They are the bigger acquirer
of gold also. It is a strategic initiative.
They are frenetically accumulating
the gold being discharged from the
West at a rapid pace. The effect on
global dynamics is profound, sure
to elevate the Asia-Pacific region.
In the next chapter, the positions
for China,
Russia, and Brazil will be enhanced. The position of the United
States and Western
Europe, including the United
Kingdom, will
be diminished. Those are the major
consequences from both the industrial
shift and gold migration.

Kaye went on with bold stories and accounts. The Western central bank gold has
been leased, even admitted by the
major central banks. The USFed has
admitted it. So have the Euro Central
Bank, the Bank of England, as part
of a wholesale leasing of gold to
the market. The price suppression
is managed typically by JPMorgan,
sometimes Goldman Sachs. They arrange
for gold leasing in quantities from
20 to 50 tons. He clearly stated that
the central banks reserve the right
to call it back, but they tend never
to do so. The USFed leans on contracts,
when making claims of gold ownership
in official accounting, in a grand
charade. Once JPM and GSax obtain
the leased gold, they go net short
and sell it for leveraged profit.

Here is the most controversial nut from the interview. Kaye said, "But
in reality the gold has been sold
into the market. That gold winds up
in places like Beijing.
But before it gets to Beijing,
it frequently goes through Hong
Kong. And when it goes to Hong Kong, it goes to our refiner, the same people we use. And by the
way, we may own some of the gold that
Germany thinks that they own.
But Germany
will never see that gold because it
is safely stored in my account and
for our investors at the Hong
Kong International
Airport.
Regarding that gold, which could
have had the symbol of the Bundesbank
on it when it arrived in Hong Kong,
a leading refiner, one of the biggest
in the world that deals with the Peoples
Bank of China (PBOC), certified. The
gold is gone. It has been hypothecated
and re-hypothecated. It is gone. Not
only does the Fed and the USTreasury
not own 8,000+ tons, they probably
own nothing." See the King
World News interview (CLICK HERE
and HERE).
Third World, dead ahead for the US
& UK,
due to gold fraud and discharged wealth.
For a good historical education on
the past criminal activity behind
the Silver Market, see the YouTube
video on the Silver Bullet and the
Empire of Lies (CLICK HERE).

◄$$$ THE SHANGHAI GOLD EXCHANGE WEBSITE INDICATES THE FIRST HALF OF YEAR
2013, SHANGHAI MOVED 1200 TONS OF GOLD. HUGE GROWING VOLUME AT THE THE EXCHANGE
FORETELLS OF GREATER PRICE INFLUENCE.
OVER ONE THIRD OF CONTRACT VOLUME
RESULTS IN DELIVERY. THEIR ACTUAL
DELIVERY VOLUME EXCEEDS THE GLOBAL
MINE OUTPUT FOR GOLD. $$$

Each Shanghai gold contract assigns 1 kg of gold. The total gold delivered
from January 2013 to the end of June
was approximately 1200 tons. The torrid
pace was even interrupted between
April 19th and May 28th, during the
Anglo gold ambush from its after effects.
An extrapolation to the full year
would bring about volume of 2400 to
2500 tons, which is roughly the total
global mine output. See the Shanghai
Gold Exchange (SGE) website data (CLICK
HERE).
Furthermore, some nuggets can be plucked
from the Shanghai data, an exchange which has received more interest lately
than any other in the world of precious
metals. Max Keiser compiled some interesting
statistics. The Shanghai
physical emphasis indicates growing
role in setting gold prices in the
future. See the Kaiser article (CLICK
HERE).

SGE volumes are only about 3% of COMEX volumes

Deliveries on SGE at 37% are significantly greater than COMEX at 2.7%

SGE deliveries totalled 236 tonnes in April 2013

Mythical premiums to COMEX barely exist, averaging 1.41% higher

Delivery amounts exceed HK gold imports and global mine supply.

◄$$$ THE SHANGHAI GOLD EXCHANGE MOVED 83.4 MILLION OZ SILVER IN THE MONTH OF
MAY. IN TIME THE PRICE WILL BE SET
BY THE EAST, WHICH OWNS THE METAL,
MOVES THE METAL, AND BUYS THE METAL.
ASIA IS NOT A
PAPER GOLD & PAPER SILVER CASINO.
$$$

The silver contract on the Shanghai Gold Exchange assigns 15 kg of silver. Therefore
in May, a total of 83.405 million
troy ounces of silver were delivered
on the SGE. The COMEX and LBMA fraud
arenas will not be able to withstand
the physical influence coming from
Shanghai, and from Hong Kong. See the Reuters article
(CLICK HERE).

◄$$$ MORE COMPETITION FROM SINGAPORE ON THE GOLD MARKET
FRONT. THE CITY
STATE HAS
LAUNCHED ITS FIRST PHYSICAL GOLD &
SILVER EXCHANGE. COMPETITION WILL
DISABLE AND EXPOSE NEW YORK AND LONDON, AS THE
TALE OF TWO CITIES GOES INTO NEW CHAPTERS.
$$$

Welcome the Singapore
Precious Metals Exchange (SGPMX),
launched with peer-to-peer bullion
trading capabilities integrated into
the trading platform in Singapore, launched on July 3rd. The custodian will be Certis CISCO
for bullion storage, a vault service
since 1986. The Singapore
exchange will provide the platform
for private individuals, traders,
and institutions to buy, sell, store,
and exchange precious metals including
gold and silver bullion, without incurring
high spread margins. Liquidity will
come to the city state, eliminating
the costs of assay linked with purchases.
The SGPMX intends to cater to the
rising demand for consolidated end-to-end
precious metals trading in Asia.
It is a large trading hub in Asia,
with an expanding base of industry
players, storage vaults, delivery
services, and trading desks for gold
to meet investor demands. The SGPMX
boasts a growing customer base of
11,000, is privately held and independently
funded. See the Scrap Register article
(CLICK HERE).
Every nation now wants to give New
York & London some competition. Free market competition
is a powerful force, enough to knock
out the Anglo centers of corruption.

◄$$$ SOUTH KOREA WILL OPEN A GOLD TRADING EXCHANGE IN
2014, THUS JOINING CHINA,
RUSSIA, AND SINGAPORE. THE WAVE IS PAN-ASIAN IN OPPOSITION
TO THE CORRUPT WESTERN GOLD MARKET
MANAGEMENT. $$$

South Korea will open the gold exchange in the
first quarter of 2014. A public market
will feature Gold spot market trading.
It will feature gold spots to be traded
in the public market like listed stocks,
according to the Financial Services
Commission (FSC).

The government regulators wish to put an end to the growing
trend of underground gold transactions
to evade value added taxes.
Such unofficial trading accounts for
over half of the country's annual
gold transactions. Included in the
unique gold exchange will be smelters
and importers of gold as well as gold
craftsman and distributors. To encourage
transactions in the new gold market,
tariff tax exemption will be offered
while providing reduction in corporate
and income taxes. See the Xinhua Net
article (CLICK HERE).
Add South
Korea to Singapore in new competition
for the Anglo fraud kings and paper
merchants.

◄$$$ RUSSIA TO LAUNCH A PHYSICAL
PRECIOUS METALS EXCHANGE, WHICH WILL
COMPLEMENT ITS CURRENT FUTURES TRADING.
IT CAN COMBINE WITH SHANGHAI
TO CREATE TWO POWERFUL CENTERS FOR
GLOBAL GOLD ARBITRAGE. INITIAL VOLUMES
WILL BE SMALL. $$$

The Russian stock exchange will start trading Gold & Silver by the end of
this year, and platinum and palladium
in 2014. Trading physical metals
is expected to boost liquidity in
the market and work together with
the futures trading that already exists
at the Moscow
Exchange. On occasion, gold has
been sold on the Over-the-Counter
market using a benchmark for price
set by the central bank quotations.
Soon comes a gold price in Rubles.
Countries such as Russia with a significant gold mine output can
work to control the price more when
a local exchange sells the physical
bars in local currency. Trade volume
will grow over time. Spot metal
trading will be based on the platform
of the existing foreign exchange market.
Credit institutions licensed to conduct
operations with precious metals and
non-banking professional brokers will
be the main players on the market,
according to the bourse officials.
The next G-20 Meeting is next September
in Moscow,
a perfect opportunity to make any
important announcements. See the RT
News article (CLICK HERE).

When The Voice was asked to comment, he was coy. He had experience in the 1990
decade in cleaning up after the Yeltsin
mess created by the Anglo big oil
firms, making numerous important business
contacts. He mentioned the Russians
have very good advisers whom they
implicitly trust, in his words. Methinks
he refers to himself and a colleague,
as having personally giving counsel
to the Kremlin. He wrote, "There
could be a lot more behind this than
meets they eye. Russians are very
good chess players, always five moves
ahead of most others. It also helps
to know that 80% of all internal Russian
trade is settled by barter. These
guys are not idiots and are far ahead
of the West when it comes to trade
without a functioning banking system."
He likes to remind that 100% of
all trade was settled within the COMECON,
the former East Bloc behind the Iron
Curtain. It was not settled in USDollars
or Deutsche Marks back then. Based
on past conversations, methinks The
Voice was behind more counsel given
to Venezuela
in demanding repatriation of their
Gold from London in 2010. Regard the Russians as working a certain key angle
that will be more clear in time, not
evident today. My belief is that the
new Moscow
spot gold market will be integrally
tied with Gold Trade Settlement with
the BRICS nations and Eurasian Trade
Zone.

◄$$$ STEPHEN LEEB COMMENTED ON GERMANY,
FRANCE, THE YUAN SWAP FACILITY,
THE USDOLLAR RESERVE CURRENCY STATUS,
AND GOLD. THE WEST IS DOING DESPERATE
DEEDS. SOON GOLD WILL BE PLACED AS
A TOP TIER BANK ASSET AMONG THE CURRENCIES
AND BONDS FOR BANK RESERVE MANAGEMENT.
THE GOLD PRICE IS HEADING TO $10,000
PER OUNCE. $$$

Stephen Leeb has been a successful fund manager for two decades. He is alert
to some global patterns with respect
to Gold, the Chinese Yuan currency,
and Bank reserves management. He made
the following points, put in summary
form with my edits. Germany
stands out as an exception, demanding
its gold to be repatriated, while
many nations in Western Europe work
to support the London crew in the gold supply network, which is shipped East to satisfy
important demands. All of a sudden
Germany, Toronto, and London
all vying to become the hubs for Yuan
trading. He left out Paris. The Chinese Yuan Swap Facility will enable the Yuan to become
a reserve currency on the fast track,
soon to be used widely in banking
systems. The trend will continue with
gusto. Germany with the Frankfurt
Main financial center strives to become
the European hub for Yuan trading.
It will compete successfully against
London.

Leeb saw the Gold ambush with official price decline as symptomatic of desperation
creeping into the American mindset,
desperation to keep the USDollar at
the forefront of reserve currency
management. Refer to the USTreasury
Bond within the banking systems. Leeb
does not really believe the USGovt
owns 8000 tons of gold reserves. The
BIS exclusion of gold from a top tier
asset holding has significant meaning.
If Gold could be used by big banks
as a liquidity buffer, critical for
holding in case of emergency, "[the
Bank For Intl Settlements] would be
blessing the concept that Gold is
a currency. Once that happens, Gold
goes to the moon. If you call the
moon five digits, that is where the
Gold price is going. That is what
the United States is scared to death of. Once you
let that little secret out of the
bag, that Gold is a top tier currency,
there is no stopping [the rise in
the] Gold price. There is no stopping
Silver. When you look at what has
happened to Gold in 2013, it will
go down as the last desperate attempt
to hold Gold back. The West still
had one gun left and they fired it
in 2013. That was something that
had to happen. The West was going
to do whatever it could to keep Gold
down. But eventually it will not be
enough." Leeb sees no top
on the Gold price. He called the recent
events a chapter that could be given
a title about a dying West turned
desperate at their last gasp. He
anticipates a $10,000 gold price in
the near future. See the King
World News interview (CLICK HERE).

As footnote, apart from any commentary from Leeb. China
is fast accumulating Gold bullion,
while the United States is fast accumulating narcotics.
The Chinese will recover from the
banking crisis, while the US will sink into the Third
World within a sea of toxic paper
and a rejected global currency that
must stand on its own value merits.
The reality behind bank overnight
management is truly ugly, incredibly
disgusting and ugly. The Anglo bank
kings do not wish to declare Gold
as a primary asset, but they permit
usage of heroin bricks in hard paper
packets to be routinely used in vault
storage to demonstrate overnight bank
holdings. My source of this information
is a fellow with friends who worked
deep in the USDept Treasury in the
late 1990 decade. The projects described
were as scummy as one could imagine,
with a central figure in Papa Bush.

◄$$$ A MONSTER PRICE MOVE IS COMING IN THE SILVER PRICE, WITH STRONG DEMAND
AND DEEP SHORTAGE. ROSEN FORECASTS
A $4300 GOLD PRICE AND A $146 SILVER
PRICE IN EARLY 2016. HIS SILVER PROJECTION
IS BASED UPON THE PREVIOUS THREE HISTORICAL
PEAKS BEING 2-FOLD, 4-FOLD, AND 6-FOLD
LEAPS IN PRICE. HE EXPECTS THEREFORE
AN 8-FOLD LEAP IN THE CURRENT SILVER
PRICE WHEN THE BULL MARKET RESUMES.
$$$

Ken Rosen is a 58-year market veteran who has seen it all. He said, "We
are on the verge of the biggest move
in the history of the precious metals
market, and it is not far away from
beginning. It is going to be a monster
move. What I do not understand is
why everybody does not see it. There
are so many analysts out there and
if they just knew how to look at a
monthly chart, and put it in a logarithmic
form, they would see that gold
and silver are going to explode. It
will outperform to such an extent
that it will almost be beyond belief.
We are looking at a massive move in
front of us that will top sometime
in 2014. At that point there will
be a correction. Then, a massive blowoff
will take us probably into early 2016.
People who have been tortured by this
long corrective phase, they will be
thrilled if they have the ability
to hang on. They just need patience
here. I expect the gold price to
hit $4300 in early 2016, but the really
fascinating thing here is the silver
chart, because there have been three
peaks. The first peak increased
two times from the previous low. The
low was $4.01 and silver went over
$8 in that move. The second peak was
$21.44. So silver increased four times
the previous low, which was $5.45.
The third peak was $49.82, and that
was six times the previous low, which
was $8.40. You have an old guy like
me who has been at this business for
almost six decades, and he sees 2,
4, 6. There is only one number that
comes up next, it is 8. We then multiply
8 times the low of $18.17, and we
have a silver price of over $148 sometime
in early 2016. It is as clear to me
as the sun rising and setting."
Rosen expects the precious metals
mining stocks to enjoy a tremendous
rise in the frenzy. He forecasts an
HUI Gold Bugs Index trading over 1000
before the bull market is finished,
with peaks reached in the metal and
stock shares together. See the King
World News interview (CLICK HERE).

◄$$$ STUNNING LEVEL OF SILVER PURCHASE IN INDIA
WILL CRUSH THE SHORTS. THE OBSTACLES
ON GOLD IMPORTS WILL RESULT IN EVEN
GREATER SILVER PURCHASES FROM MUMBAI
TO DELHI
AND OTHER BIG CITIES. INDIA
& CHINA
ARE GOBBLING UP SILVER AT AN ASTONISHING
LEVEL, A LARGE PORTION OF WHAT THE
WORLD PRODUCES, APART FROM INDUSTRIAL
DEMAND. $$$

The data out of India is astonishing, magnificent. In the first
five months last year, India imported 1900 tons of Silver. So far
in the first five months of year 2013,
India has imported 2400 tons, a 26% comparable
increase. Next contrast to the global
annual silver mining output at 25,000
tons. Extrapolate to find India on track to take out 5760 tons of silver
this year. Therefore India is grabbing 23% of global silver production.
This is not sustainable at current
prices. The destination is not industrial
usage, but savings and investment
forms like bars, coins, bullion items,
and jewelry. The data showed that
India imported 720 tons in April (annualized at
8000 tons). In May it rose to 900
tons (annualized at 11,000 tons).
The acceleration is phenomenal. Juxtapose
in reality to a 25,000 ton market.
That is impossible to continue. There
is not that amount of silver available
for investment. Price must adjust,
or the supply chain halts altogether.
The lesson from India
is that if obstacles have been put
in place to purchase Gold, the citizens
of the one billion population nation
will turn to Silver in purchase. They
do not want fiat paper. Eric Sprott
concluded with some emotional cheer,
"It looks to me like the [two
nations] India and China are buying it all right now. If this
data is true, we have the most phenomenal
story for Silver that you could possibly
imagine. We will just nail those
paper sellers to the wall here."
See the King World News interview
(CLICK HERE).
The banksters will lose control of
the gold gate, but the silver horse
will speed through.

◄$$$ GOLD SMUGGLING HAS GONE RAMPANT IN INDIA,
AFTER BANK OBSTACLES, NEW IMPORT DUTIES,
AND OTHER TAXES WERE IMPOSED. DESPITE
SOME LARGE SEIZURES AND CAPTURES AT
AIRPORTS, MOST SMUGGLED VOLUME PASSES
THROUGH THE BORDERS AND AIRPORTS.
THE PRACTICE WILL GROW FURTHER. PRICE
PREMIUMS JUMP IN INDIA,
AS IMPORTS DRY UP, LEAVING JEWELERS
VULNERABLE TO SHUTDOWNS. $$$

Gold smuggling has ramped up in India, as response to tougher
laws and rules. The Air Intelligence Unit of the Mumbai Customs thwarted another attempt to
smuggle gold into the country from
Dubai, one of several cases recently. A big
shipment was caught in the first week
of July, weighing 2.86 kg in gold
valued at $113k. The level of
smuggling from Dubai is massive, having reached unprecedented
levels since it is more costly in
Mumbai. A different seizure last month
was of 94 gold biscuits worth $437k
from five Sri Lankan nationals at
Chennai airport. The racket is active
and in high volume. Be sure to know
that only a tiny fraction of the smuggled
gold is actually being dis covered
and caught.

The proximal cause is the halt in bank sales of gold coins, then the hike in
import duty. Officials pointed out
that smugglers and buyers of smuggled
gold tend to save on import duty as
well as other taxes like value added
tax and income tax. The VP of the
Mumbai Jewelers Assn expects smuggling
will gain momentum in future weeks
and months. See the Mine Web article
(CLICK HERE).
The Indian wedding custom is to regale
the bride with gifts of gold, a tradition
extending over centuries. See the
daughter of the Muthoot Finance Corp
CEO, whose outfit bears 5 kg gold
in a wedding ceremony. Most weddings
feature gold jewelry worn, but rarely
in such grand ostentatious volume.

The Law of Unintended Consequences is hard at work across the cities of India. The motive to slow the vast import business
that threatens the Rupee currency
in devaluation has instead threatened
the organized merchants in the gold
industry. The jeweler shops and
retail centers are in dire straits.
Their survival is not assured. Gold
has been selling at huge premium prices,
as imports quickly dry up. The surge
in smuggling demand will serve the
market well. Those who abide by the
rules will be knocked out of business.
See the Economic Times article (CLICK
HERE).

##
HISTORICAL GOLD INVERSION SIGNALS

◄$$$ PICTURE WORTH 1000 WORDS. THE GERMAN GOLD REPATRIATION DEMAND IS
A TURNING POINT IN
MODERN GOLD MARKET HISTORY. IT PROMPTED
OTHER NATIONS TO DEMAND THEIR GOLD,
ALONG WITH EXTREMELY WEALTHY FAMILIES
IN CENTRAL EUROPE.
IT PROMPTED THE ANNOUNCEMENT OF A
FRESH WAR IN THE AFRICAN NATION MALI, WHERE TERRORISTS WERE
NEWLY SPOTTED (ABSURD). IT ALSO PROMPTED
THE NEED FOR GOLD MARKET AMBUSHES,
WHICH WILL EVENTUALLY LAY BARE THE
CORRUPTION OF THE COMEX AND ITS NULL
INVENTORY. THE SHUTDOWN OF THE COMEX
IS A GUARANTEED FUTURE EVENT. $$$

Gold fund manager Grant Williams attributes the recent
pounding of the gold price to Western
central bank efforts to recover enough
real metal for repatriation of the
Venezuelan and German gold reserves
vaulted in the London
maze.
With so much Western central bank
gold long ago having been leased and
then sold into the market to suppress
the price, the shortage required ambushes.
The ostensible motive was to ferret
out more gold from wrecked futures
contracts, and even to depress demand
for Gold. But what has resulted
is a massive rise in gold demand worldwide,
and exposure of the COMEX dire shortage
in inventory. Williams cites all
the recent developments noted by GATA
in confirmation of schemes in market
rigging. The graph shows vividly how
the gold price plummeted after the
German gold repatriation request,
in lockstep with plummeting ETFund
holdings of gold. The gold in the
major funds is being stolen, pillaged,
ransacked, altered, and robbed in
the open daylight.

The psychopaths on Wall Street and in London City
have turned desperate, probably immediately
after the German Govt demanded its
gold from the official account in
New York and
London and Paris.
Other nations followed. Lower official
gold price is very likely, as the
bankster criminals attempt to pry
more metal loose. But they have not
pried much metal at all. Their actions
have opened the door for covering
more short futures contracts. The
banksters have exacerbated the situation,
igniting gold demand worldwide, while
exposing the COMEX & LBMA as dry
empty vacant market arena. The
latest symptom is the negative GOFO
forward rate for gold, probably negative
for much longer than they report,
due to falsified data. See the Cafe
Americain article (CLICK HERE).

◄$$$ JAMES TURK REPORTS ON REMARKABLE EVENTS IN GOLD MARKET. THE BACKWARDATION
IMPLIES SHORTAGE OF PRECIOUS METALS,
DISTRUST OF THE DELIVERY PROCESS WITHIN
THE PAPER MARKET MECHANISMS, AND THE
RETURN OF GOLD PRICE CONTROL TO THE
PHYSICAL MARKET. THE RISE IN LONG-TERM
USTBOND YIELDS MEANS THE USFED HAS
REACHED A TIPPING POINT. INTEREST
RATES ARE RISING IN PART FROM THE
EFFECT OF MONETARY INFLATION APPLIED
FOR OVER THREE YEARS. TURK OFFERED
A BRILLIANT BRIEF LECTURE ON FAILED
BANKER SOLUTIONS, INTEREST RATE EFFECTS,
AND GOLD PRICING SIGNALS. IN THE PROCESS,
THE USFED BALANCE SHEET HAS REACHED
THE $3.5 TRILLION MARK. $$$

"There
are two major events underway which
everybody should be paying close attention.
The first one is rising interest rates.
We saw another huge surge in rates
to a new multi-year high after the
unemployment report on Friday, which
is very telling. We need to look at
this rise in interest rates in relation
to an economy that is barely crawling
along. Here we are nearly five
years after the 2008 collapse, yet
people are still looking for an economic
recovery. [Think no official solutions
anywhere.]

Of
course there have been some bright
spots, but they are isolated. The
economy remains in a weak state and
will not reach its pre-collapse level
until employment goes back to its
previous high, with people once again
filling the quality jobs they previously
held, rather than the part-time and
hamburger flipping positions that
have distorted the unemployment report
by making the headline number look
better than it really is. Yet the
Fed continues to purchase more government
debt, as its balance sheet last week
reaching another new record high with
total assets of $3.49 trillion.
The Fed is not tightening monetary
policy, so why are interest rates
rising even though the economy is
weak and the Fed continues to purchase
debt for its QE program?

I
think there is only one logical answer.
Interest rates are rising because
of QE. We have reached a tipping point,
meaning that QE can no longer keep
interest rates from rising. The market
is now focusing on the dark side of
QE, which is the inflationary consequences
of all this money printing. [Foreigners
also are angry over debasement of
their FOREX reserves by the USFed.]
Rising interest rates with QE ongoing
means that we have reached the stage
where the Fed has now lost control.
This result was inevitable because
market forces always beat central
planners and its groupies in the end.
Only the timing of this event could
not be predicted. Since the bailout
of the financial system in the autumn
of 2008, and the launch of QE in March
2009, desperate central planners
had been hoping their crazy theories,
which try to create wealth by printing
money, would work. But those theories
never had a chance. All one had
to do was read monetary history to
see that these schemes have always
failed.

The
key point is that the market is
now responding to this central
planning foolishness. Capital is protecting
itself by demanding higher interest
rates, and as interest rates climb,
the fallout will be immense. This
brings me to the second key event
taking place. Even the LBMA website
now shows that Gold is in Backwardation.
The Gold Forward Rate out to three
months is negative. The LBMA stopped
reporting Silver Forwards last year
because they were artificial. They
showed silver in contango, but you
could not deal at those rates. The
obvious implication is that Silver
was actually in Backwardation. The
point is that Silver, and particularly
Gold, are not supposed to go into
Backwardation, at least in theory.
That is because they have huge aboveground
stocks, in contrast to other commodities
that have limited aboveground stocks.
[Hence the aboveground stocks are
much lower than listed, from rampant
leasing, as Gold has gone into hiding.
See Gresham's Law.]

Look
at the current backwardation in crude
oil for example. The August 2013 contract
is $10.47 higher than August 2014.
So if you have physical crude in hand,
you sell it today and immediately
buy the Aug-14 contract, earning not
only the $10.47 per barrel price difference,
but you also have the use of the $103.22
you receive as the proceeds from your
sale. To top it off, you avoid storage
charges for one year. So clearly,
there is a shortage of crude oil.

Backwardations
in oil can occur because its supply
is limited. Its aboveground stock
is counted in days of use, in contrast
to gold where the aboveground stock
is essentially all of the gold mined
throughout history. So when backwardation
occurs in gold, it is an earthshaking
event. People who own physical
metal do not want to profit from the
backwardation, even though they are
only taking a credit risk for as short
as one month. They want to own
physical metal, regardless of
the potential profit, because earning
this potential profit depends on the
ability of the entity selling the
future contract to deliver physical
metal to you when the contract comes
due [NO TRUST].

Gold
Backwardation is occurring because
the big bullion dealers, hedge funds,
and arbitrageurs do not want to take
this risk. This phenomenon highlights
the difference between physical metal
and all of its paper substitutes.
When backwardation in the metals occurs,
it means two things. First, people
want physical metal and not paper
promises to deliver metal in the
future. Second, it means that the
physical market is starting to drive
the price of the metal, rather
than what we have seen the past several
months where paper selling drove Gold
& Silver prices to abnormally
low levels.
The bottom line is that in a year
or two when we look back at today,
we will marvel at how cheap the prices
of physical gold and physical silver
plummeted to." See the King World News interview
(CLICK HERE).
Contrast Turk's frontal lobe explanations
with Rob Kirby's higher level hidden
machinations in explanation. Both
are valid.

◄$$$ A HISTORIC INVERSION HAS BEGUN. GOLD FORWARD RATES HAVE TURNED NEGATIVE
FOR THE FIRST TIME SINCE THE LEHMAN
FAILURE. IT MEANS SHORTAGE IN THE
PHYSICAL GOLD SIDE, HEAVY SELLING
IN THE PAPER GOLD SIDE, AND A POSSIBLE
BULLION BANK FAILURE IN PROGRESS.
$$$

While Gold Backwardation in general means a lack of trust and confidence in
the fiat monetary system, and a defacto
rejection of paper money, the negative
Gold Forward Rate means even more.
Ignore the decline in the official
gold price, since no price discovery
exists in the COMEX & LBMA anymore.
The negative GOFO rate is an immediate
distress signal across all chambers
of the gold market from all the interconnected
moving parts. It is the monetary
multiple fire alarm, which will blossom
into the basic Backwardation in the
futures contract prices for all to
see.

In early July, the 1-month Gold Forward Offered (GOFO) rate turned negative,
going from +0.015% to -0.065%, the
first negative print in nearly five
years. The last time was right after
the Lehman bankruptcy and AIG bailout
in November 2008. Harken back also
to the 1999 announcement of the Washington
Agreement on gold among central bank
collusion, to find another time that
particular GOFO rate went negative.
The shock of central bank collusion
ending in open control of the gold
suppression at that time, and the
shock of the introduction of Quantitative
Easing by the USFed in 2011, made
for important flips in the GOFO rates
into negative territory. Witness
history being made.

The Gold Forward Offered Rate are rates at which contributors are prepared to
lend Gold on a swap against USDollars.
Quotes are made for periods of 1,
2, 3, 6, and 12 months. The contributors
are the Market Making Members of the
LBMA. They are the Bank of Nova Scotia
& ScotiaMocatta, Barclays Bank,
Deutsche Bank, HSBC Bank USA at London Branch, Goldman
Sachs, JPMorgan Chase, Societe Generale,
and UBS. Basically it is the core
of the banking syndicate. From
the GOFO is derived the Gold Lease
Rate, obtained by subtracting
the average GOFO rate from the corresponding
LIBOR average in USDollar terms.
The set GOFO price is established
by quorum contributors, much like
with LIBOR. The GOFO price is used
as a basis for some finance and loan
agreements, as well as for the settlement
of gold Interest Rate Swaps. In a
sense, Gold serves as a money equivalent
collateral for a quasi-secured loan
against USDollar paper fiat in hand.
When the GOFO goes negative, it
means gold market dislocations have
occurred. It is a good indicator of
major stress in liquidity, counter-party,
and collateral in the gold market.
All three are interconnected in
crisis times. In early July, both
the 1-month and the 3-month GOFO rates
went negative.

Interpretations of the historic inversion are difficult to pinpoint. Something
very abnormal, and even historic,
is afoot at the nexus of the gold
fractional reserve lending market.
See the Zero Hedge article (CLICK
HERE).
The story has gone mainstream, soon
possibly to go viral since so important.
Even a CNBC story cited the inversion.
See the Reuters article (CLICK HERE)
and the Financial Times article (CLICK
HERE).
Regard the negative GOFO rate as an
indication of an explosive upmove
in the Gold price due to magnificent
shortage amidst a broken market, certain
to kill the COMEX in time. Tyler Durden
concluded that it could be one of
many things.

A repricing of paper and physical gold induced by Exchange Traded Funds